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.
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
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
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.
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.
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.
P.S. The Texas Co. is quite active in drilling
the Port Neches dome. There are at least three drilling rigs there