Production - Domestic - Oil and Gas Developments in the Rocky Mountain Region in 1942

Wildcat drilling in the Rocky Mountain region did not suffer as large a decline in 1942 as was anticipated. The drilling program laid out by the Government at the beginning of the year stressed wild-catting operations and called for reduction of drilling in proved fields. The increased wildcatting campaign did not yield a great many new discoveries, nor important extensions to old fields. Several interesting wildcat wells were drilled in Colorado in 1942 but no new fields were discovered. The Wilson Creek field was extended and about 400 acres added to its reserves. In Montana two new oil fields and two small gas fields were discovered. The developments in the marketing situation had improved, however, making the prospects especially bright for 1943, as will be shown presently in the section on Montana in this report. In New Mexico eight wells were completed, which constituted discoveries ol either oil or gas but none of these was of major proportions. In Wyoming one new oil field and one new gas field were discovered, and one old oil field and one old gas field were extended. Most important was the disco-very of prolific oil producers in deeper sands in three old oil fields, of which one at least, Elk Basin, probably is of major proportions. Government Action On Dec. 26, 1942, President Roosevelt signed the O'Mahoney bill, calling for a flat 12.5 per cent royalty on lands in the public domain. It is expected that the enactment of this bill will encourage wildcatting in the public land states. Opportunity for a full discussion of the problems of reserves and production was afforded at the hearings conducted on the O'Mahoney bill by the minerals subcommittee of the Senate Committee on Public Lands and the statements submitted at these hearings last fall placed the situation, its causes and the logical remedy, clearly on record. It was established at the hearings that for several years the volume of oil discovered per wildcat well drilled has steadily declined; new fields discovered have not been of major proportions; drilling costs have advanced rapidly; a sharp decline in exploratory drilling took place in 1942, while the proportion of dry holes increased; the inescapable conclusion is that to find new reserves the search for oil must be intensified and much more wildcat drilling ' must be done. To ensure an adequate drilling campaign, the Petroleum Industry War Council, the Interstate Compact Commission and other representative oil organizations have voiced by resolution their opinion that an upward revision of crude prices is necessary to provide an incentive to the prospector to undertake the hazards of wildcat drilling, since statistics prove that only ope in five or six wells drilled results in actual production. Former Price Administrator Henderson rejected the recommendations for price increases and declared himself unalterably opposed to a general price advance, On the ground that such advances would contribute to inflation. Now that Mr. Hender-