Recent Changes In California Voluntary Oil-Curtailment Methods

FROM Aug. 31, 1937, until Apr. 30, 1939, there were 40,872,610 bbl. of oil run to storage in California; from Apr. 30, 1939, to Aug. 31 of the same year 5,512,912 bbl. were withdrawn from storage. But from Aug. 31, 1937, to Aug. 31, 1939, the number of producing wells in the state has increased from 17,706, with a potential production of 1,323,202 bbl., to 18,910, with a potential of 2,302,282 bbl. Thus, in a period of two years, during the first 20 months stocks increased over 1/3 and during the following four months stocks decreased 1/30. In the same two years the number of productive wells increased 1/15 and potential increased 3/4. Undoubtedly, the large increase in stocks created the pressure that caused the reduction in stocks that followed; yet this has come about in spite of the larger number of wells and higher potential. Cause of the change was the adoption on May 17, 1939, by the Central Committee of California Oil Producers of a uniform method of oil curtail-ment for all wells throughout the state. Acceptance of the method in the four months following adoption by practically all fields in California indicates that producers generally are convinced of its merit and fairness. True, some operators still overproduce, but the restraint practiced by the remainder of the industry has been sufficient to turn a situation headed for chaos into one of reasonable stability. Credit for this change goes to the industry itself, because it has all been accomplished under voluntary oil curtailment.