Discovery of the Panhandle Oil and Gas Field

The following article comes from the book Panhandle Petroleum, Edited by Bobby D. Weaver, Panhandle-Plains Historical Society, Canyon, Texas. Funding for the book was provided by the Pioneer Corporation and was printed by Miller National Corporation, Amarillo, Texas, 1982.

by N. D. Bartlett

Like many other great discoveries, the opening of the great Panhandle Oil and Gas Field was the result of an accident, or rather an incident in the performance of another task.

C. N. Gould, then professor of geology at the University of Oklahoma, was given a commission by Theodore Roosevelt to trace the water sources of the Canadian River drainage area. That was in the years 1903, 1904 and 1905. The information was for the use of the United States Geological Survey.

It was while engaged in this work in Potter and Hutchinson counties that he noted and mapped the structure that later was to produce such valuable quantities of oil and gas.

It has been estimated by competent geologists that two-thirds of the state of Texas is potentially productive of oil or gas, or both. We do know that in the state at this time there are some 560 fields or separate areas where these natural resources are found. These separate fields range in size from comparatively a few acres to the immense area 125 miles long and eight to twenty-five miles wide known as the Panhandle Oil and Gas Field. To what extent the now productive area of the Panhandle will be extended it is difficult to say. However, it has been frequently predicted by scientists who have made a study of formations and conditions of the territory that new oil and gas pools will be found here for the next twenty years. The deeper formations which produce in other sections of the Midcontinent have hardly been touched as yet in the Panhandle. Four widely scattered tests have been drilled to these formations but there is room for several deep pools of great size between them.

The information on the gigantic structure running from the southeast to the northwest through the Panhandle remained forgotten in the papers and reports of Mr. Gould from 1905 until 1916.

It was then M. C. Nobles, pioneer Amarilloan, by a chance question, brought this information with its resultant discovery to light. Nobles had employed Gould to make a geological report on some prospective oil land in Oklahoma. This report was unfavorable and it was at this time that Nobles asked Gould if he knew of any likely oil territory in the Panhandle of Texas. Gould re-examined his report made some ten years earlier and told the Amarillo man of his structure discovery along the Canadian River.

Gould was employed by Nobles and several Amarillo associates to map out the structure more carefully and make a location for a test well. This work was completed in October of 1916 and work started on the first well in the Texas Panhandle. This well was to be the forerunner of the greatest gas field in the world and one of the greatest oil fields. It was completed in December, 1918, at a cost of $70,000. The well was drilled to a depth of 2,605 feet and had an initial production of ten million cubic feet of gas daily. It was located just east of the John Ray Butte in northern Potter County, about thirty miles north of Amarillo on the Masterson ranch and was designated the Amarillo Oil Company No. 1 Masterson.

Subsequently several other wells were drilled in the vicinity of the No. 1 and completed for gas. The most prolific was the No. 4 Masterson which had an open flow volume of 104 million cubic feet daily. This discovery caused a lot of excitement in the oil industry and many of the major companies flocked to the new prospect buying leases and doing research work.

It was not until three years later that oil was discovered. The first well was drilled by the Gulf Oil Company on the Burnett ranch in Carson County several miles east of the completed gas wells. It was completed May 2, 1921, for an initial production of 175 barrels of oil daily. This was the second well drilled by the Gulf Company on the Burnett lands, the first one being a gasser.

It was one thing to find a new oil pool and another to market the oil. The following development started off rather slowly on account of lack of pipeline facilities; however, during the next four years a definite pool had been opened in the vicinity of the discovery oil well.

Pushing north into Hutchinson County, the Gulf drilled the first well in that county north of the Canadian River on the Dial Ranch. It was completed for 135 barrels. This started additional development between the two pools in the area later to be known as the Borger Field. The first big oil producer in this area was drilled in 1925 by the Twin Six Oil Company, a group of twelve Amarillo men. It was located east of the site that later was to become Borger, one of the wildest of the oil boom towns. The Twin Six, headed by Jay Ray, sold the lease in the heyday of the boom for a cool million dollars.

The success of this group inspired literally hundreds of people living in Amarillo to invest in oil companies that drilled on tracts ranging in size from ten acres to 500 acres. In all, some 114 local companies sold their stock to ready buyers. In that form of promotion, about twelve million dollars was invested of which eight million dollars had to be chalked up on the loss side of the ledger. In other words, Amarillo people absorbed about eight million dollars worth of worthless oil stocks in the first two years of the boom.

The extensive development of the Borger Field started off with the announcement January 11, 1926, of the Dixon Creek Oil Company, another local concern, of its No. 1 Smith spouting into the tanks to the tune of 10,000 barrels a day. From that time on during the following two years, the excitement was intense and the usual boom accompanying the finding of a new major pool was on in earnest.

Amarillo grew by thousands overnight. Every town in the Panhandle close to the field doubled and trebled in population. In the early stages of the boom and before Borger had any rail connections, the town of Panhandle, previous to the oil operations a small plains town, developed into the second freight point on the Santa Fe system. Only Chicago showed more tonnage. The bubble burst, however, with the branch line of the Santa Fe to Borger tapping the heart of the oil development.

The original oil development in Canon County in 1921 gradually spread to the east and considerable prospecting was getting started in Gray County. The first production there as in Carson County was gas. The first oil well for the area that was to dominate the whole field in production and number of wells was the No. 1 Worley-Reynolds, drilled by the Wilcox Oil and Gas Company, an Oklahoma independent company. It was completed January 31, 1925, for an initial production of sixty barrels per day. Following this discovery, several producers of like size were brought in, but the extensive program started off with the bringing in of the Clark and Baldridge well for 700 barrels June 12, 1926. From that time on Gray County forged ahead, soon overtaking Hutchinson County, both in drilling operations and in daily production.

Wheeler County development had preceded that in Gray County by a few months, but most of the production there had been gas, with a few small oilers, and the area did not receive much attention except from gas companies interested in obtaining reserves for pipeline use.

It was not until early in 1933 that the oil trend in eastern Gray County was followed over into western Wheeler County with the result that one of the most prolific pools in the Panhandle was then developed there. This development, however, lacked the wild excitement of the early discoveries because of the fact that the oil industry had been put under wraps, so to speak, by proration, and only an orderly program was permitted by state authorities. This pool was soon definitely defined, to the east and south running into heavy gas and to the north into dry territory.

Early in 1926 Moore County received a play on the theory of the northwest trend extension and the first oil well was found there that year. The erratic nature of the formations encountered soon discouraged development on a big scale and the county has not as yet taken its place as one of the heavy oil producing counties of the field, although several big wells have since been brought in there. It has proven to be the best gas area in the field and the largest gas wells in the district are in Moore County. One was completed two years ago for a daily flow of 176 million cubic feet. The gradual development of the field has determined as facts, many things concerning the geology of this field that were only theories at the outset.

Geologically the structure lies along a buried granite mountain range known as the Amarillo Mountains, which extends along the length of the field continuing in a southeasterly course through southwestern Oklahoma where it comes to the surface as the Wichita Mountains at an elevation of 1,000 feet above sea level.

The field which extends along this buried range stretches from eastern Wheeler County to northern Moore County in a southeast northwest direction. It is approximately 100 miles in length with an average width of eight to twenty-five miles, and contains 1,510,227 acres of which 256,912 acres are in Wheeler and eastern Gray Counties and are known as the east sweet gas field; 847,371 acres lying west of this field and known as the west sweet gas field; and 405,944 acres in the sour gas area which lies on the north flank of the granite ridge. Although the entire field projects through the counties of Hartley, Moore, Hutchinson, Potter, Carson, Gray and Wheeler counties the oil production is confined to a series of pools extending along the north flank of the structure for a distance of 110 miles and due to the stratigraphy of the oil bearing formations oil is found both in the sweet and the sour gas areas.

The oil and gas so far encountered in the Panhandle field have been found, with minor exception, in four separate zones, namely: the brown dolomite, the gray lime section, the gray dolomitic section and the underlying granite wash, which is disintegrated granite from the buried granite ridge.

The cumulative operations and production for this field according to the latest figures available are as follows: a total of 6,296 wells have been drilled, ninety percent of which have been producers of oil or gas or both. At this time there are 3,900 producing oil wells and 1,760 wells producing gas. The majority of the gas wells produce sweet gas for pipeline use. A small percent of the gas wells have no market connection. The total amount of oil produced in the Panhandle from the discovery of the field to January 1, 1938, was 304,208,920 barrels. The total gas withdrawal to that date, computed on a two pound above atmospheric pressure base was seven trillion, six hundred billion, cubic feet.

On June 1. 1938 the daily potential oil production, as computed by the Railroad Commission, was 1,178,796 barrels and the allowable production, daily, under state proration, was 80,796 barrels, or 1.1228 percent of the proratable oil.

The daily open flow of the 1,760 gas wells was twenty-billion feet. This figure is exclusive of the casing head gas used in the production of oil. The daily allowable gas flow, under state proration on March 1, was 1,077,612,000 cubic feet. This is divided 113,564,000 cubic feet to the eastern sweet gas field, 514,048,000 feet to the west sweet gas field and 450,000,000 feet to the sour gas area.

On January 1, 1938, there were in operation forty-six natural gasoline plants with a daily capacity of 2,539,500,000 cubic feet of gas. To that date they had manufactured 49,363,354 barrels or 2,073,260,868 gallons of natural gasoline. For the past two years, the daily production of natural gasoline has been materially cut by operation of the law which forbids the use of sweet gas in the operation of these plants and by proration of the sour gas.

On the above date there were in operation in this field, thirty three carbon black plants with a burning capacity of 978,000,000 cubic feet of gas daily. The total output of carbon black since the field's first plant was 1,591,865,000 pounds.

--Reprint, Courtesy Amarillo News-Globe, August 14, 1938

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