Crude Oil
March 29, 1931
Regarding oil conditions in the East Texas field, the price in some cases have dropped to $0.25 per barrel, although most of the oil is still shipped around $0.35 and $0.40. Proration is strongly being urged there, and no doubt will win. At present about 270 rigs are working there.
I am enclosing a clipping from the orange Leader of March 26th telling about a lease executed on Feb. 21st with a 90-day drilling obligation on Josh Bland tract in Orangefield.
April 1, 1931
Smith County, Texas posted a prize of $10,000 for the first gusher, and the day before yesterday one was brought in at 75,000 barrels, but in one day, it went down to 20,000 bbl.
Orange Petroleum is reworking the old Berwick well and going from the 3,900 ft. strata to the 4,100 ft. sand. In fact, Sanford and Susuki said in conversation that if the Bland tract was drilled, even a new well, it might come in profitably. Their old Bland well is about 7 years old, but it still produces an average of 35 bbl. a day and no salt water. Hardly any trouble occurs on that well.
The Jefferson Production Co. that is drilling soon on Josh Bland tract has set up close to the Orange Petroleum well, and between it and the Rio Bravo well which had produced so long, and one of their rough-necks saw me yesterday and jokingly mentioned that they will have us offsetting their new well. By us, they mean Orange Petroleum.
May 31, 1931; The Orange Leader
Rig Set On Kishi Tract Ready For Drilling Monday. Indications Saturday were that Gulf Production company would start drilling Monday on a new location on the Kishi tract of land, situated on the north line of the producing area of the Orange oil field. Saturday, work of making electrical power connections and setting up the drilling rig was about complete. Many of those who have observed the arrangements declare that the pump in this outfit is the largest ever brought to the Orange field. This well will probably be carried to a record- breaking depth.
June 11, 1931
The Orange Petroleum reworked the Michel-Berwick No. 3 and succeeded about ten days ago to make it come in at about 900 bbls. It is now flowing through ½” choker at about 125 bbls per day. This is quite lucky for the company because the oil prices were cut again in the Gulf Coast, and the average price for the Orange Petroleum Company’s crude probably brought them $0.50 per barrel. Then too, the fact they have now a flowing well on the Michel-Berwick lease, which had stopped producing since last September makes good news. …
I once cabled you about the East Central Texas crude oil situation but right soon after that time the price became more stable. Again, the price structure of the entire fields together with the prices for the whole mid-continent due to the East Texas production fell. Oil can be purchased there at from $0.10 to $0.25 for the 38 to 40 gravity. I have later learned that by taking the cracking method about 75% can be converted to gasoline.
Re: New Well. The Gulf Production Company had located the well on the condition of the drilling obligation in the larger portion of the June contract for leasing to them of 1930, the total acreage of them both being 200 acres. This well location was made on May 21th and with diligence they kept on and begin spudding in late 5th of June or early 6th. On the morning of the 10th, which was yesterday, they had reached 1,490 feet with a 14” bit. They encountered sand and gravel, which the driller thinks was the water strata from 435 to 595 ft. Again, at about 650 to 700 ft. they went through some more sand and gravel. The machinery and pump on this well is up-to date and very big. They intend to go down as deep as 6,000 ft. if they don’t find anything good enough to screen and produce. The instruction now to the driller is to find a good seat in the gumbo when he gets to about 1,900 to cement in the casing. As to the exact location of this well, I can best describe it as being almost touching the west boundary of the Orangefield High School tract and about 285 feet north of the Highway.
January 17, 1932
George Colburn told me that he exchanged cables with you regarding prospective shipments of East Texas Crude to Japan. He told me that Yount-Lee wants to sell loaded in tanker at Beaumont for $1.05. For profit, Colburn wants $1.10. The gravity is 38 Baume’. Yount has plenty of storage, as you know, and has a pipeline built recently from the East Texas Field; therefore, there is assurance of plenty of supply. The quality of that crude, needless for me to explain, is good, sweet crude of high gasoline content.
Colburn tells me that your reply by cable was the difficulty of meeting the Pacific Coast crude rates to Japan, but he hoped that if the quality and price meet the satisfaction of some of the men you are in touch with in Japan, he hoped both you and he could have a good business started.
February 2, 1932
P.S. The Texas Co. is quite active in drilling the Port Neches dome. There are at least three drilling rigs there now.