RI 3479 Review Of Cutler's Rule Of Well Spacing

"INTRODUCTION The development of methods for determining the total quantity of crude oil that a given pool could be expected to produce in the future and the well-spacing and drilling programs most likely to result in the recovery of the maximum quantity of oil at the minimum cost became problems of acute concern to American oil producers and petroleum engineers during the second decade of the twentieth century, The United States faced what seemed at that time to be a serious shortage of petroleum, and it appeared that the constantly increasing demand for petroleum and its products could not be adequately supplied. Undrilled prospective acreage, which until then had been plentiful, seemed to be getting scarcer, competition was increasing, the margin of profit to the producer was shrinking, and the need for developing constructive policies of conservation appeared paramount. As a result of physical and economic changes then taking place within the petroleum industry prompted by the seemingly uncertain future, accurate knowledge pertaining to the probable future production of oil wells and of oil lands especially was needed and greatly desired. Furthermore, the need for obtaining the maximum quantity of oil from known fields caused technical information - which up to that time had not been deemed essential to the successful and profitable operation of oil lands - to be sought eagerly. The need for technical information, such as methods for determining future reserves of oil and the rate at which the oil could be obtained under a specific program of drilling, was emphasized further with the passage of the Revenue Act of 1918, and oil producers with enough income to place them in the taxable class were compelled, for the first time, to report their taxable income 4/ to the Treasury Department."