Petroleum Development in California during 1926

CONDITIONS in California a t the end of 1926 are so strikingly similar to those that existed a t the end of 1922 that there is good reason for wondering as to whether or not production in the year 1927 will be similar to production in the year 1923. Unfortunately for those interested in seeing no excess supply of oil, the answer is that it may.

By December 1922, California production had increased to an amount similar to but less than the average production of California during 1926. Although a further increase in production could well be anticipated a t the beginning of 1923, i t was not until April that fairly accurat,e estimates of the peak of production for that year could be made. In 1922 there was hope, also, that any peak reached might be quickly passed. At the end of 1926 production in California consisted of a settled and stabilized amount of about 600,000 bbl. a day with 30,000 to 60,000 bbl. of flush production and an additional 57,000 bbl. shut in. These facts and conditions are graphically Shown in Fig. 1..

Drilling activity in the Seal Beach field is so great that there is little hope for anticipating any marked decline in pr~duct~ion during the next 6 months for the entire state, while production may be materially increased. Declines in flush production will not be as large as formerly because the gas lift will be used to stabilize production from wells that cease to flow and do not make good pumpers.

The outstanding events of 1926 in California listed in the order of their importance are as follows:

Production

1. Discovery of a new field a t Seal Beach. 2. Intensive development of a separate structure in Huntington

Beach field in the townsite area. 3. Important extensions in the Ventura Avenue field. 4. Extension and development of the Kraemer sand in the Richfield

field. 5. Discovery of a new field a t Poso Creek. 6. Curtailment of development of a deeper zone in the Inglewood field. 7. Disastrous development of the Los Cerritos extension of the

Signal Hill field.

* Geologist, Associated Oil Co.

JOSEPH JENSEN 617

Wil&at Activities

1. Finding of oil sand in the Cypress wildcat well in the Potrero district, midway between Inglewood and Rosecrans fields.

2. Finding of oil sand in the Smith well west of Hawthorne.

Drilling and Operating

1. Drilling to a depth of 8046 ft. in the Brea Olinda fields. 2. Completion of commercial wells in the Ventura Avenue field to

depths of 6800 ft . and completion of other wells in the'sarne field where the top of the oil zone is nearly a mile below the surface.

3. Stabilizing and sustaining of production due to the use of gas-lift and gas-drive methods in various fields.

Refining

Demonstration that California oil can be treated by various cracking processes.

The hunt for an oil field a t Seal Beach began in 1921. Thirteen or more wells were drilled before commercial production was secured by the Marland Oil Co. in its first important discovery in California in its Bixby No. 2 well Aug. 4, 1926. This well penetrated only 28 ft . of shale and oil sand. Its initial production was 1256 bbl. per day but this had increased to 2490 bbl. before the cnd of the year. The difficulty a t Seal Beach was not so much the lack of assurance that the oil field existed in that area as i t was the lack of data as to where it might be found. As early as 1924, production of oil had been secured and gas blow-outs indicated that a large accumulation of gas existed in that district.

The Seal Beach field lies in that chain of fields extending from Ingle- wood through Rosecrans, Dominguez, Signal Hill and Huntington Beach. Each of these fields has been a prolific producer. At some point within every one of them from 400 to 600 ft. or more of continuous oil-bearing formation has been developed. The same condition may be expected a t Seal Beach.

Were i t not for the conflicting information secured in wells heretofore drilled and. abandoned, no doubt as to the future of this field would exist among those not directly involved in its present development. There is no lack of faith manifest in the future of the field by those companies now operating in the field. If the production situation in California is disturbed by a surplus of oil, this surplus will come from the Seal Beach field.

618 PETROLEUM DEVELOPMENT I N CALIFORSIA DURING 1926

At the close of 1926, there were 5 producing wells producing a total of 10,000 bbl. per day. In addition to this, some 30 to 35 other wells have been located preparatory to the beginning of work or have spudded in. Most of these wells are confined to the northwest end of the field. They belong to two of the three operators in the field. In the central part of the field a t the shallowest depth from which oil has been com- mercially produced, drilling activity a t the end of the year was less intensive.

Much of the land in the field is overflowed tide land which has been partially filled in by dredges in anticipation of townsite development so characteristic of Southern California. This tide land necessitatesdriving piling and building special roads to locations. After these preliminaries which take from 20 to 30 days, a well can be drilled to its primary water shutoff a t about 4400 ft. in about 30 days and placed on production in not more than 15 days. This promises a cycle of new wells every 75 to 90 days until the field is developed. The only factor, other than cur- tailment of operations, that may retard such rapid completion of wells, is the fact that the true thickness and extent of the two proven zones and the third probable oil zone in the field have not been fully established. The upper sand is known as the nixby sand and has been found a t a depth of 4337 ft. in the shallowest well. The next sand is known as the Selover sand which has been proven in one well a t 4725 ft. A third sand has been cored a t 5200 ft. on the edge of the field. I t offers every promise as a source of production in the center of the field.

In 1925, intensive drilling in the Inglewood field resulted in the production of that field increasing from 5000 bbl. per day to 116,000 bbl. per day in 3 months. More recently the Hunt,ington Beach townsite saw its production increased from 5000 bbl. per day to 60,000 bbl. per day in about 4 months. n7ithin the first 6 months of 1927, Seal Beach production may reach 50,000 to 75,000 bbl. per day. Initial productions of 2000 to 3000 bbl. per day may be expected in the early life of the field.

The oil now being produced in the Seal Beach field varies in gravity from 23.5' to 26" B6., depending upon the oil zone from which it comes. I t has a gasoline content of 23 to 27 per cent.

The existence of oil adjacent to the area developed during t hc last. five months of 1926 in the Huntington Beach townsite has been.known ever since December, 1921. The City Council of Huntington Beach, however, set aside the area recently developed and prohibited drilling therein. At an election on April 12, 1926, an ordinance was passed permitt.ing drilling in this district. Although there had been intensive leasing in anticipation of this lifting of the restrictions, no operat or was part iculnrly willing to start

work in the 1ownsit.e area. Hence, it was that the Superior Oil Co. Jones No. 1 well was not completed until July 29, 1926. Fig. 2, showing wells and production data for the Huntington Beach townsite area, summar- izes the remainder of the story and shows how this district reached a peak of 61,000 bbl. per day during December from less than 90 producing wells. Hardly 120 acres of land are involved. The townsite has clearly passed its peak of production. The number of drilling wells is decreasing and fewer wells are being begun. The oil zone here is about 1300 ft . thick but most of the production is being secured from the richer sands occurring immediately above and below a depth of 4000 feet.

ANUSST SPILCM- OCIZdFP I NOYPM&EB I LECEMk?. I

FIG. 2.-WELL AND PRODUCTION-DATA, I~UNTINGTON BEACH TOWNSITE AREA, 1926.

The d~monst~rated success of the gas lift in maintaining production during that period of the life of a well when i t ceases to flow and fails to pump satisfactorily will help prevent the townsite area from showing the sharp decline in production which might reasonably be expected under former conditions. The IIuntington Beach oil varies in gravity from 20' to 25' BB. and its gasoline content varies from 20 per cent. to 25 per cent. The natural gas associated with the oil runs particularly high in gasoline in comparison with usual conditions in new areas. .

620 PETROLEUM DEVELOPMENT IN CALIFORNIA DURING 1926

Poso CREEK

This area which is located about 10 miles north of the Kern River field in the San Joaquin Valley is one in which prospecting has been going on for a long time with more or less indifferent success. Discovery of commer- cial production was made May 27, 1926, by the Shell Co. Vedder No. 1 well in sec. 9, T. 27 S., R. 28 E., M. D. B. & M. Between the depths of 1767 and 1976 ft., 209 ft. of oil-bearing formation were found. This well had an initial production of 287 bbl. of 15" to 16" BQ. oil. This oil falls in the class of fuel oil but fortunately it is also valuable as s stock for lubricating oil. The Shell well was deepened to 3130 ft. when it encountered older rocks that demonstrated that deeper drilling was not worth while. Other wells in the area have had an initial production of nearly 600 bbl. per day.

Thus far the field has neither a telephone line nor a pipe line serving it, and after testing, the wells are usually shut in. Only 5 producing wells have been drilled. The land is held in large parcels and no intense drill- ing campaign is in sight. . The data secured in Shell Co. Vedder No. 1 well, in demonstrating the extent of the oil zone, indicate that no bon- anza production may be expected but that with conservative develop- ment and wide spacing of wells, a paying field will be dcveloped.

The Richfield field is one of the most easterly fields in California and lies near the mouth of Santa Ana Canyon in Orange County. Two anti- clines are present in it. The larger one to the west representing the main field, was intensively developed between 1919 and 1922. The deeper and more valuable sand, known as the Icraemer sand, was found in the west end of the field and developed in an easterly direction. The pres- ence of intermediate water interferred with the easterly development of this sand for a long time. Within the last year and a half, however, the horizon of this intermediate water has been located and the problem solved by a second water shutoff.. On the smaller anticline of the field, earlier wells drilled for the purpose of finding the Kraemer sand only found oil with water. The wells produced less than 400 bbl. per day, hence, in competition with the gusher fields of 1923 and 1924, this production did not appear especially attractive.

In the main field General Petroleum Corp. Stern No. 6 was completecl on August 1,1926, a t a 2564-bbl. rate, below the intermediate water sand. This created a great deal of interest in the field but because of the hard formations which must be penetrated, results of new drilling following this discovery have not yet been realized. Those wells drilled in the main field do not promise to duplicate results of the Stern well. On the smaller anticline, Continental Oil Co. Pyne well No. 1 was completed

JOSEPH JENSEN 621

just after the first of the year 1927 a t a depth of about 4270ft. Itsinitial production was 1200 bbl. of 23.5 gravity oil, containing about 24 per cent. gasoline. This discovery will cause new drilling during 1927 that should result in a t least 15 to 20 wells being completed.

CURTAILMENT IN DEEPER ZONE AT INGLEWOOD

During 1925, the Inglewood field, adjacent to Los Angeles and Culver City, increased in production from 5000 bbl. to 116,000 bbl. per day in 3 months' time. Most of the wells in the field produced from 1250 to 1300 ft. of oil-bearing formation, but Shell Co. Rindge No. 9 proved the pres- ence of 1800 f t . of oil-bearing formation. The oil produced from the upper 1300 f t . varied in gravity from 16" to 22" BB., while the oil from Shell Co. Rindge No. 9 well was 29" BB.

In the spring of 1926, when the production of the Inglewood field had fallen to half its peak production, one of the operators in the field began to deepen a well into this lower oil formation with the result that a sim- ilar well was started on neighboring property. The first well failed to develop the lighter oil because of water trouble, but the lighter oil was actually developed by the Associated Oil Co. in its Vickers No. 2 well which was placed on production a t a 1700-bbl. rate of 23.8" BB. on June 4, 1926. After the well had been permitted to clean itself, it was shut in. Production was derived from 400 ft. of formation lying immedi- ately below the upper 1300 ft. previously developed in this well.

Owing to the regularity of the formations in the Inglewood field, the size and extent of the field and the evidence thus far secured in Shell Co. Rindge No. 9 and Associated Oil Co. Vickers No. 2, it is not unreasonable to assume that a 90-day drilling campaign could produce 50,000 bbl. per day of light oil from this lower 400 ft. of formation. There is no likeli- hood of this occurring in 1927 as all drilling requirements and lease requirements have been or can be fulfilled by developing the upper zone. Aside from the drainage due to Shell's Rindge No. 9, no one is suffering a loss of oil by having this production left undeveloped.

DEVELOPMENT OF LOS CERRITOS EXTENSION OF SIGNAL HILL

The beginning of 1926 witnessed an intensive drilling campaign well under way in the northwest end of the Signal Hill field where sands occur- ring a t about 4300 ft . were being developed. This district is known as Los Cerritos. It consists entirely of town lots.

The oil-bearing formation proved only to be about 100 ft . thick. Later on, some 70 ft . of oil sand were found a t about 4800 ft. The very first wells completed had an initial production of as high as 2500 bbl. per day, but the average production, even in the early days of the develop- ment of the Los Cerritos area, was only about 400 bbl. per day. Fig. 3 shows that even though 150 wells were producing from these two sands in

FIG. 3.-WELL AND PRODUCTION DATA, LOS CERRITOS EXTENSION OF SIGNAL HILL FIELD, 1926.

JOSEPII JENSEN 623

the Los Cerritos area, its product,ion did not reach 19,000 bbl. per day. Since last July, the production of the field has been declining very regularly from about 18,000 bb1:to 7700 bbl. per day. There is little to indicate that this production will not continue to decline in a regular manner.

In contrast with'the performance of Los Cerritos, the more recent performance of the Huntington Beach townsite is very pleasing. In the Huntington Beach townsite where there are a very few new operators, at lea& 80 per cent. of the wells drilled will pay a fair to good profit.

At the end of 1925, all of the production of the Ventura Avenue field in Ventura County was concentrated adjacent to Ventura Avenue in an area about 2000 ft. wide and 7500 ft. long. During the year, the Shell Co. extended the field 2200 ft. to the west and the Associated extended the field 5000 ft. to the east, giving it a total length of 14,700 ft. or nearly 3 m. The width of the field is now proven along Ventura Avenue to be over 3000 f t . No dry holes have actually established any of the limits of the field thus far. That the producing width of the field will not narrow abruptly along the anticline to the east has also been demonstrated by the discovery of oil on the north flank of the fold. Hence, the east end of the now proved field promise<to begat"least~1500';tof2000 . - ft. wide.

Wells.in the Ventura field have reached a depth of 6800 ft. without finding bottom water. Five companies are operating in the field but the larger part of the district is in the hands of two companies whose drilling in 1927 should hardly be as intensive as it was in 1926. During 1926 the production increased from approximately 30,000 bbl. per day to 54,000 bbl. per day. A further increase in 1927 is possible but no great increase is probable. Fig. 4 shows well production data for the Ventura Avenue field-for 1926.:

OTHER FIELDS

The presence of substantial flowing production at 5300 ft. was proved in the Long Beach field more than 2 years ago by the Marine Oil Co. In November, 1926, the Richfield Oil Co. completed its Haas No. 8 well a t a depth of 5317 f t . with an initial production of 2700 bbl. This has resulted in several new wells being started. Production so developed will probably not increase the production of the Long Beach field in 1927.

Table 1 shows California total and daily average production for 1926 by fields.

Although there were opportunities in other fields for the drilling of new wells and other development work, conditions during 1926 were such that not a great deal of work was undertaken although some was done.

624 PETROLEUM DEVELOPMENT I N CALIFORNIA DURING 1926

JOSEPH JKNSEN 625

For the purpose of comparison, California's total production for the years 1920 t.o 1926, inclusive, is tabulated below in yearly totals and as daily averages.

Year 1 Total Production (Bbl.) 1 Daily Average Production (Bbl.)

December, 1926, production estinlatcd.

WILDCAT ACTIVITY

Wildcat drilling has been intensive in the state during 1926. Already the Seal Beach and Poso Creek fields have passed from wildcat areas to proven territory. Most of the wildcatting furnished negative results and served to condemn certain districts. Oil sand was foundin 1926 in the two areas mentioned below, but drilling and testing of these areas has not gone far enough to indicate whether they will also become commercial districts in 1927 or be placed back on the waiting list of old areas to be tested again.

POTRERO DISTRICT

The Potrero district lies in East Inglewood midway between the Inglewood and the Rosecrans fields. In the district extending from Inglewood to Huntington Beach, as more fully outlined in the discussion relative to Seal Beach, the Potrero district is the only prominently ele- vated extensive topographic feature which has failed thus far to yield an oil field. Already 7 wildcat wells have been drilled by a number of the larger companies of the state.

During the spring of 1926, the Associated Oil Co. leased about 1000 acres of land in the Potrero District and proceeded in July to drill a wild- cat well. This well was shut down on Nov. 11, after i t had penetrated several small oil sands. The 856-in. casing is cemented a t 4383 ft., and the bottom of the hole is at 4450 ft. The formation immediately above and below the cementing point of the 8%-in. casing is sand which gives a cut in ether similar to that secured in the sands in the Rosecrans field.

In order' to avoid precipitating any intensive drilling campaign a t this period of threatened over-production, it was deemed best to leave

the well standing cemented without testing. The significance of the discovery of oil sand remains entirely unknown. As to how long this condition will continue is uncertain. One other operator started drilling a nearby well and other locations have been made. Should this well, or any other, be completed and placed on production, the end sought, by allowing the Associated well to remain cemented, will not have been realized.

As far back as 1920, the presence of natural gas in large quantities was proven west of Hawthorne by two blowouts during the summer of that year. The Smith well is located one mile due south of the two gassers. At approximately 5600 ft. i t cored some oil sand. Upon a test the well showed some heavy oil but not enough to make a commercial well. During 1927 this well will unquestionably be deepened further to see if there is any additional oil sand. The great depth of the well is a dis- couraging factor against early results in 1927.

Although the completion of the E. J. Miley Athens well at a depth of 7591 ft. in the Rosecrans field during the year 1925 was a marvelous demonstration of the ability of operators to drill, events in 1926 have proven two things: First, that drilling to this depth is not exceptional and, second, that commercial wells can be completed to slightly shallower depths without particular difficulty.

During 1926, the Chanslor-Canfield-Midway Oil Co. drilled its Olinda No. 96 well in the Brea Olinda field to a depth of 8046 ft. Dur- ing the same year, several wells were completed in the Ventura Avenue field a t depths in excess of 6000 ft. The deepest commercial producing well is Associated Lloyd No. 32 in the Ventura Avenue field. This well is 6850 ft. deep and had an initial production of about 1000 bbl. I t is being repei;.forated for increase of production.

Associated Lloyd No. 38, near the end of 1926, was 6815 f t . deep and was soon to be completed.

Shell Edison No. 10 well in the same field is 6613 ft. deep. I ts initial production was 4600 bbl. per day and a t the end of the year it was flowing at a 1708 bbl. rate.

Many of the wells in the Ventura Avenue field do not encounter the oil formations from which production is secured until depths of 4500 and 4800 ft. have been passed. In a few of the outlying wells, it is even necessary to drill a full mile from the surface before the zone from which production is secure is encountered.

JOSEPH JENSEN 627

TABLE 1.-California Total Production for 1926 b y Fields ( A . P . I . Figures)

Total Barrels

Daily Average Barrels

Kern River . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,360, 432 I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 946

McKittrick 1,964, 976 5. 383 MidwaySunse t . . . . . . . . . . . . . . . . . . . . . . . . . . 33.992. 655 1 93. 130 Elk Hills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.227. 276 1 33. 500 Lost Hills-Belridge . . . . . . . . . . . . . . . . . . . . . . 1.693. 599 Coalinga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' 1 7.308. 377 Wheeler Ridge . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375. 546 Watsonville . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21. 067

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Santa Mar is 1,859, 004 Summerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 47, 177 I

Ventura-Newhall . . . . . . . . . . . . . . . . . . . . . . . . . ! 5,651, 812 Los Angeles4a l t Lake . . . . . . . . . . . . . . . . . . . ' 674, 994 Whittier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ~ 748, 248 Fullerton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,947, 927 Coyote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,058, 886 Santa Fe Springs . . . . . . . . . . . . . . . . . . . . . . . . . . 17,479, 674

4. 650 20. 023

1. 029 57

5, 093 129

15, 484 1, 849 2, 050

19, 035 16, 601 47, 890

Montebello . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Richfield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hungtington Beach . . . . . . . . . . . . . . . . . . . . . . . . Long Beach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Torrance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Domingue l; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rosecrans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inglewood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Newport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ventura Avenue . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,518, 252 17, 858 5,550, 743 15, 207

19,175, 114 52, 534 37,952, 914 103, 980 10,361, 389 28, 387 7,781, 151 ' 21, 318 6,141, 634 16, 826

17,388, 452 36, 990

11,338, 870 Seal Beach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 562, 095

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221,221, 463

47, 640 101

31, 065 1, 540

614, 305

SUSTAINED PRODUCTION DUE TO GAS LIFT

During the past year, there has been sufficient discussion of the use of the gas lift to make its operation well known . In this same period, i t has been clearly demonstrdked that most wells that are not able to flow and have difficulty in pumping may be successfully operated by the use of the gas lift . Such operation sustains production a t approximately the same rate of flow as the well has just prior to the time when i t ceased flowing . This continues for a period of from 6 to 18 months . The result of the general use of the gas lift has been to stabilize the production, particularly of the Dominguez field but production a t Signal Hill, Santa Fe Springs and Huntington Beach has also been sustained by the use of the gas lift .

During 1926, 3 years after the Meyer sand a t Santa Fe Springs was exploited, two wells were drilled into Meyer sand and placed on

628 PETROLEUM DEVELOPMENT I N CALIFORNI-4 DURING 1926

production, one a t an 1100 and the other a t a 600-bbl. rate by the use of the gas lift. During 1927, the older fields, except Dominguez, will probably derive less benefit by the use of the gas lift. In the newer fields, such as Huntington Beach townsite, Seal Beach and Ventura, the introduction of the gas lift should prevent any very rapid decline in the production of these fields, although it cannot prevent a moderate decline.

REFINING ACTIVITY

Appreciable quantities of California oil are now being treated by cracking processes. Although i t is true that the gasoline so made is mixed with straight run gasoline, the fact that the cracking processes are now handling crude oil a t a rate in excess of 10,000 bbl. per day indicates that these processes are passing beyond the experimental state.

TABLE 2.-lllmzthly Production of Gasoline by Cracking Process

I 1925 1926 -- -. -- ~ -

Daily Daily Aversge, YI,",";~ I Average I 1 Barralr I , Barrele.)

a Forty-two gallon barrels. b Figures not available.

During 1927 a further extension of cracking of California oil is to be expected even though it may be necessary to continue to mix cracked gasoline with straight run gasoline. The quantity of straight run gasoline available in California for this purpose is very great so that even with such a limit.ation, the ext.ension of such practice promises to be important.

I - - - . - - - January.. . . . . . . . . . . . . . . . . . . . .

-- - - -. -

6,369 1 205 i February.. . . . . . . . . . . . . . . . . . . . March.. . . . . . . . . . . . . . . . . . . . . . April.. . . . . . . . . . . . . . . . . . . . . . . .

4,346 19,922 . 714 9,624 57,021 1 1,839 2,610 55,035 1,835 0

May . . . . . . . . . . . . . . . . . . . . . . . . . 33,291 1,074 5,671 June.. . . . . . . . . . . . . . . . . . . . . . . . . 18,653 622 16,746 July.. . . . . . . . . . . . . . . . . . . . . . . . 14,968

. . . . . . . . . . . . . . . . . . . . . 19,142

August.. 0 September.. . . . . . . . . . . . . . . . . . . 57,355 October.. . . . . . . . . . . . . . . . . . . . . . 8,302 1 265 ' 317,633 November. . . . . . . . . . . . . . . . . . 7,083 236 1 330,177 December.. . . . . . . . . . . . . . . . . . . . 1,508 1 b

Total.. . . . . . . . . . . . . . . . . . . . . / 245,342 1 763,304 Monthly avernge. . . . . . . . . . . . I 20,445 1 --- I 69,391 Daily average.. . . . . . . . . . . . . I ' I 6 7 3 1