Papers - Production - Domestic - Developments in the California Oil Industry during in the Year 1937

The trend initiated in January 1936, of stabilized gasoline prices, increased demand and extraordinary drilling activity, continued in California during the year 1937. Crude prices were maintained during the year at the highest level since September 1930. Wildcat activity with resultant new discoveries and development of proven acreage were greater than in any year since 1928. Many fields in California in former years have been produced at full capacity, with consequent loss of reservoir energy, but at the present time continued activity is maintained to develop adequate reserves, so that production in these fields can be taken at a rate to correspond with good operating practice. Naturally, this good operating practice will be influenced to some degree by gas outlets and, in certain instances perhaps, by oil outlets. In any event, these last two controlling features will result in favorable rather than detrimental operation. In fields producing from great depths, ultimate production will be practically limited to the flowing and compressor life of the well, since there is as yet no economical method for pumping wells below depths of approximately 7000 ft. Experience has shown, however, that such pumping difficulties will be overcome and that production secured by pumping will add some to reserves established on the flowing life of the wells. California continued to operate under voluntary curtailment, but with unlimited transfers of allowable between various fields. Even though there was at all times considerable production above the Umpire's established quota, a constantly increasing demand reduced storage during the year. This increasing demand was due mainly to the rapid rise in Pacific foreign shipments from May to September. It is questionable, however, whether this favorable condition will be maintained over a prolonged period. (See Fig. 1.) Field Discoveries The great drilling activity during the year resulted in the discovery of three new fields in the San Joaquin Valley, as well as many extensions