Losses like these, however, should be apparent to everyone. The great losses in the oil industry, which have not yet been remedied and which are a constant cause of unnecessary expense, may be summarized as: (A) Unnecessary drilling due to (a) Poor locations, (b) Too many wells to acreage.
(B) Improper drilling methods due to (a) Poor drillers, (b) Inexperienced operators, (c) Dishonest operators.
(C) Low oil recovery due to (a) Allowing premature escape of gas, (b) Water troubles, (c) Inefficient operating methods.
Inexperienced operators often lose heavily by going into areas where there is little or no chance of success, and then expending large sums on unnecessary drilling equipment or on long hauls, with the result that they use up their money before they are fairly started.
Thousands of wells are drilled in the United States every year of which 80 per cent are successful. The balance, or 20 per cent, are unsuccessful wild cat or prospect holes in new areas, and dry holes drilled in the proven areas. (See Table 5, page 36.) The greatest waste in such drilling operations is due to locating the test wells in areas that have so little chance for oil that the risk is not justified.
Geology reduces risk, and while geological tests are not always successful, it is safe to say that 1 success in 5 is a fair average. This is more efficient than 1 in 300, which is the proportion of success without geology.
Again, tests may be so located that they do not prove any thing worth while. One hears the statement that the drill proves only 6 in. around the hole. This, however, is a sophistry. One properly located test may prove the entire absence of oil in an area, although under certain conditions several wells may be desirable. There are cases where dry holes occur in the hearts of oil fields, but this is exceptional. Also, some holes are drilled in granite or in igneous rock.
Wherever dry holes or abandoned wells are found, one stock story is current explanation for the failure. It is told from the Atlantic to the Pacific Coast. "They struck oil, but the Stand ard Oil Company bought them off, and plugged the well." I can say that in my experience and active travel in oil fields I have not found a single instance that would check up that stock story.
In a few instances holes had been abandoned by oil men on lands that later were developed into oil property. It was the misfortune of the earlier operators to lose. Whenever this stock story is told, smile at it and admire the nerve of the oil man who spent his money on a failure and gave up only because his funds were exhausted or his drill would go no further.
Everyone who drills wells knows the discouragement of "dry holes," and can laugh grimly at tales of "being bought off." Fraud may occasionally be practised, but very seldom.
An accurate history of the oil fields would recount numerous instances of men who have drilled 40 or 50 dry holes before making a successful strike. One operator drilled 150 dry holes before success crowned his efforts. This drilling was carried on in areas of shallow and medium depth in the Eastern and Mid Continent areas at a time when wells cost from $5,000, to $10,000. The persistency and bull-dog tenacity of the old-time oil man is well illustrated by these pioneers. It can be truth fully said that a true oil man must be an optimist of optimists.
The human side of the history of the oil industry is full of stories of nerve and courage—of strong men who blazed the way for the rest of us. We should thrill with pride and admiration for the pioneers who forged ahead of the crowd and opened new fields under the most discouraging conditions. Many of them failed to reap the fruits of their efforts, and in numerous cases the only monuments such men have left behind them are the oil fields that have been developed because of their earlier efforts.
The courageous spirit of our American oil pioneers has been handed down to their sons, and now that Americans are invading foreign fields, this spirit will win out. Englishmen may boast of their control of foreign fields due to the diplomatic assistance of their government, but when the future history of the world's oil fields is written, we shall find American names and American companies playing a big part in foreign fields, despite our late start. Anyone who knows Americans, their courage, and te nacity, can feel only confidence in the final outcome of America's place in the struggle for control of the oil supplies of the world.