Saving Dry Holes.—At least 95 per cent of the dry holes now drilled could be avoided. Some dry holes must be drilled. Oper ators, however, in outlining a proven oil pool now start a score or more holes where three or four would limit the pool just as well.
After oil has been found the system of close off-setting is sometimes followed. Unnecessary line fights which are waste ful may develop. In some areas town lot drilling is resorted to, which means that four to five wells per acre are drilled where one well to 4 acres would be ample. Such excitements are not rarities. They have been experienced in pools like Burkburnett, Texas; Paola, Kansas; and Cleveland, Oklahoma. In some places, as at Spindletop, Texas, the acreage is parceled out into lots as small as H6 acre. Such wasteful drilling should be avoided or regulated by law.
Even good operators, however, often put too many wells in a given area. In the Ranger and Stephens County areas of North Central Texas one well to 20 acres would be sufficient to obtain all the production, but one well to 5 acres was considered good practice.
Escape of Gas.—Allowing natural gas to escape is one of the greatest sources of loss in the oil industry. Natural gas is the cheapest lifting power available.
Inexperienced Drillers.—Other wastes are due to poor or in efficient drillers, or drillers unfamiliar with the areas in which they are drilling. It may also be the tendency of drillers to loaf on the job. Hundreds of thousands, if not millions, of dollars are lost every year by inefficient drillers. Such men either do not know their business or deliberately make work last longer than is necessary. The latter can be done only too readily. Drilling troubles can be innumerable, and every trouble possible and plausible.
Inexperienced Oil Operators.—Many oil companies are man aged by men who know nothing at all of the oil business, and who undertake important operations like drilling oil wells without any idea of the risks and difficulties to be encountered. Such men will raise $25,000 for drilling a well when $50,000 is needed. As a result they run out of money quickly and must re-finance, if possible. Thousands of holes have been suspended due to the lack of the funds necessary to complete them to the depth nec essary for a thorough test. Such holes not only cause financial losses but do not test the area drilled.
Dishonest Operators.—Dishonest operators are not plentiful.
They are the parasites of the oil business. This applies especially to the cheap operator or promoter who makes his money by organ izing a company and selling stock to the public on the basis of "blue sky" alone. Such a man may personally get a lease for $1000 and turn around and sell it to his company for $50,000, knowing that it is not worth 500. Yet he has taken his profit legally.
Waste of Gas.—The greatest loss in efficiency is in wasting the natural gas. In oil fields it is not an uncommon thing to have the drill touch the oil sand, and where heavy gas is encountered allow the gas to flow until the well "drills itself in." Wells making 10,000,000 cu. ft. per day have flowed wide open for 3 months. In actual heat units that meant a waste of 10,000,000, 000 B.t.u. In terms of coal of 12,000 B.t.u. per pound, that meant 833,333 lb. or 416 tons of coal per day, or 526,315 lb. of oil, equivalent to 1571 bbl. of 335 lb. each. And this waste went unheeded. It is not alone the waste, although that is most serious and is important, but the fact that we have thrown away the cheapest and best lifting force for oil that can be found.
The best example of common-sense handling of flowing wells with gas is the Salt Creek Field in Wyoming, and it furnishes un disputed evidence of the value of gas as a lifting agent.
The big flowing wells in the Maricopa Flats, California, were controlled wells. The same wells were capable of flowing from 5000 to 20,000 bbl. per day if turned loose, but they were held down to a flow of 500 to 1000 bbl. per day, with the result that they flowed several years without resorting to pumping, some even as long as 5 years. Flow plugs of extra hard steel from ; to in. in diameter were inserted in the flow lines, and the oil passed through these plugs which acted as reducers. Such well control means ultimately more oil, and lower operating costs. Oil recovery is higher, as the gas both drives and sucks the oil out of the pores.
Water Menace.—Water is a constant menace in the oil fields. Many operators do not understand water conditions. They all agree that water in large quantities is a bad thing, but do not take the time to study the reasons for its presence. "If we've got water, what more can be said?" is the attitude of many of them.
Pennsylvania and West Virginia " old-timers " did not under stand the new conditions obtaining in the California or in the Mid Continent oil fields. "Flooding," in the sense of killing the oil sands by the infiltration of waters from top or bottom, was not well understood by eastern operators. The fact that water from holes several locations away from producing wells might destroy good wells was not brought home to the oil men until careful engineering tests were made. To-day, however, there is no excuse for careless or slip-shod methods of handling water problems. Sooner or later most of our oil fields will be flooded with water, but premature flooding is inexcusable.