A Method Of Projecting U.S. Petroleum Supply

This paper presents a methodology for long-range studies of petroleum supply, to meet projected demands, that involves modifications of procedures used previously. This paper continues a series of papers on this general topic in the AIME, the most elaborate recent one being that by Warren Davis given in February 1958. The procedures considered here begin with the assumption that the governmental framework of regulations and taxes remains fixed- but that price changes. After .these procedures have been reviewed, the effects of changing certain governmental controls, will be considered in order to judge their potential effects on future supply. This is an essential step because controls cannot be expected to' remain static in a situation changing as much as the petroleum. industry and because such changes are within-the scope of alternative ways of adjusting to impending problems. The first procedure begins with: a) trends in drilling success, b) relation between field income from oil and gas and footage drilled, c) declines in capacity from production, d) trends in capacity of new and producing wells, e) all monetary values are in constant 1958 dollars, and f) target amounts of domestic crude petroleum production. 'From these components projections are obtained of: 1) numbers of future producing wells required, 2) footage drilled, 3) new wells drilled, 4) crude oil found, 5) capacity of producing wells, 6) completion costs, 7) finding costs, 8) production costs, and 9) average wellhead crude oil price consistent with the footage-field income relationship.