Production - Domestic - Oil and Gas Developments in Oklahoma in 1939

The chronicle of the oil industry in Oklahoma in 1939 is one of declining production bolstered by strenuous efforts to find new pools or new producing horizons in the older, highly exploited, relatively shallow areas. Production, which averaged 608,000 bbl. daily in 1937, the post-depression peak, declined to 463,000 bbl. daily in 1938 and continued downward to 421,000 bbl. daily for the year 1939. While the state could produce somewhat more oil if demand warranted it, production in most areas is at as great a rate as could be justified on the basis of maximum efficient operation. Outlet for Oklahoma crude has been seriously affected by the increase in production in the Illinois Basin. Crude movements from the Kansas-Oklahoma area to the northeastern consuming centers averaged 314,000 bbl. daily in 1939 as compared with 397,000 bbl. in 1938. Oklahoma producers bore the brunt of this loss of market. The general production decline was accentuated by the August, shutdown of 15 days, precipitated by the action of a major crude purchaser posting a 20-cent reduction in the price of crude. The Oklahoma Corporation Commission, in collaboration with other members of the Interstate Oil Compact Commission, ordered a complete shutdown of all producing wells in order to prevent the premature abandonment of stripper wells, which might result from a prolonged period of production at prices below operating costs. The reduction in price was forestalled, most major purchasers failing to meet the cut in view of the shutdown, and the company initiating the move rescinded its action. Fear of the shutting in of oil wells, especially those making considerable quantities of water, is generally unfounded in the light of a superficial examination of the records. Oklahoma's unprorated pools, which produced 154,000 bbl. daily in May, declined to 152,000 bbl. in June and 143,000 bbl. in July. Immediately following the shutdown, the same pools produced 150,000 bbl. in September, 145,000 in October, and 145,-000 in November. Thus, while the half month's production loss in August has not been made up, the wells apparently hare produced at a greater rate since the shutdown than immediately preceding it.