Stabilization - Economics and Well Spacing in Texas (With Discussion)

During the last decade the known reserves of petroleum in the United States have increased from about five billion to over thirteen billion barrels. From the standpoint of public welfare the existence of these known reserves presents an undeniably favorable picture, but viewed from the position of many a harassed operator the blessing has not always been considered an unmixed one. Along with this increase in excess reserves, curtailment of production has come into being as a matter of necessity and the principle of proration as a matter of equity. As a practical matter it has been considered necessary to curtail the production of old wells as well as that of new wells in a pool. The right of new pools to produce has been recognized, and the allowable for them has come partly from increased market demand and largely from the allowables already enjoyed by the developed pools. The natural result—a downward trend in daily per-well allowables—has been especially felt by Texas operators. This trend may be illustrated by Table 1, which comprises the five active areas in Texas, and from which may be noted the following: 1. The average daily allowable per well has decreased about 53 per cent in three years. 2. Of the 184,000-bbl. increase in total allowable for the five areas, 29,000 bbl. came from the increase in state demand and 165,000 from the combined allowables of the remaining pools in the state.