Total exploratory drilling in North America in 1964 increased slightly over 1963. Activity in Canada was up sharply; a moderate increase occurred in Mexico; and a moderate increase also was noted in the United States. Actual figures, with 1963 counterparts in parentheses, are as follows: Canada, 1,386 wells (1,153) and 6,211,275 feet (5,622,120); Mexico, 104 wells (99) and 936,529 feet (815,881); United States, 10,747 wells (10,664) and 55,496,688 feet (53,485,462). A total of 2,195 wells, or about 17.94 per cent of all exploratory holes in the three countries (about one in five), proved to be capable of producing some hydrocarbons. However, in the United States the "success" percentage declined to an all-time low of 16.71 per cent, or about one producing well for each si drilled. This decline was offset somewhat by the fact that the percentage of apparently commercial finds among new-field wildcats improved from 1.5 in 1963 to 2.0 in 1964.

INDEX OF TABLES AND CHARTS

Table

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Table

This is the 29th consecutive annual report for the United States. Canada and Mexico have been included for 17 years, beginning in 1948.

ORGANIZATION AND FUNCTION OF C.S.E.D.

The Committee on Statistics of Exploratory Drilling (C.S.E.D.), which gathers and reports these data, is composed of 35 active members, all appointed by the president of the Association. Thirty-three serve as district chairmen, one as committeeman-at-large to assist in consolidating the statistics and preparing the final report, and one as chairman of the whole Committee. In addition, a large number of geologists and scouts are appointed by district chairmen to carry on the work in the districts. These members of the committee collect the factual information upon which the report is based; however, it seldom is possible to present a complete list of these members because of the frequency of unreported changes. A list of the latest record is placed at the end of this text with apologie for any omissions.

The name of each district chairman and the territory for which he is responsible are indicated on the outline map, Figure 13. Each is personally familiar with the geology of his district, conversant with C.S.E.D. designations, and has adequate scouting sources of information. Hence, the statistics are believed to be complete, and the classifications are applied with professional competence by men who adhere strictly to the definitions which have become standard over the many years that this industry record has been kept.

The Committee is charged with the tasks of: (a) counting and recording on behalf of the industry the number of exploratory holes which are drilled for hydrocarbons and are completed each calendar year in Canada, Mexico, and the United States; (b) tallying and recording the total exploratory footage that these holes represent; (c) determining the proportion of producing wells to dry holes; (d) comparing the results of technically guided drilling with those of the non-technical; (e) distinguishing the different kinds and degrees of exploration risk by classifying the exploratory wells according to their position with respect to established production, i.e., whether outpost, extension, new-pool, or new-field, and counting the number in each category; and, finally, (f) cataloging all disc veries and making an estimate of the order of magnitude of their ultimate recovery in order to differentiate commercial and non-commercial discoveries. The assignment is confined strictly to exploratory drilling; hence, the exploratory purpose of a well at the time of commencement must be known, if a well is to be included in the record. This is true, even though events may sometimes change the classification of a well between the time a well is started and completed. Additional rules have been adopted, some arbitrary, to achieve consistency in the counting from year to year. For instance, "stratigraphic tests" and "core tests" always are counted as wildcats if they reach formations capable of producing hydrocarbons, and if they would and could be completed if an accumulation were encoun ered. Wells drilled offshore from floating vessels for the purpose of discovering new hydrocarbons but which, even if successful, could not for mechanical reasons be completed as producers are nonetheless counted and their footage recorded; this is done because they are exploratory wells drilled for the purpose of discovering hydrocarbons. Some wildcat wells are treated similarly in California's Los Angeles basin, where the urban situation compels abandonment and later redrilling of productive tests. Some potentially productive wells in this group will be counted as dry holes, and their "twins" drilled later will be scored as "new-field" wildcat discoveries. This will alternately depress

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and inflate the success statistics, but the two effects will tend to offset each other. In any event, the exploratory footage will be correctly recorded in the year drilled.

"Old wells worked over," i.e., previously abandoned tests which are re-entered for another completion attempt but which require no new exploratory drilling, have not been included in the tables and charts. This year, for the first time, the number of these re-entries that did open new fields reported in the text.

TECHNICAL VS. NON-TECHNICAL BASIS FOR DRILLING

When the Association began compiling Exploratory Drilling Statistics on an annual basis under direction of F. H. Lahee, the effectiveness of science in oil finding was a matter of considerable

Table I. NUMBER OF EXPLORATORY TESTS DRILLED IN EACH STATE - 1964

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interest. Hence, an attempt was made to differentiate wildcats which were drilled on the basis of scientific information from those which were drilled at random without scientific guidance and to compare the success to failure ratio of these two groups. However, the random well commonly has a degree of technical guidance. Therefore, this distinction proved increasingly difficult to make as the years advanced. Moreover, the success ratio of science-guided drilling was so markedly

Table II. NUMBER OF U.S.A. EXPLORATORY TESTS DIVIDED BY CLASSES 1964

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superior and the number of non-technical operations so small that this particular feature of analysis was considered outmoded. As a consequence, it was dropped temporarily from the report in 1960. In response to demand, it was restored in 1961 for data from the United States, and now is continued as a regular feature of the report (Fig. 8 and Table XI). Actually, in 1964, only about four per cent of all new-field wildcats were reported as known (or thought to be) non-technical, and more than two-thirds of these were from three districts in Michigan, Ohio, and north Louisiana. None encountered a "profitable" accumulation and the "success" ratio was lower than six per cent.

SIZE ESTIMATES OF NEW-FIELD DISCOVERIES--TRIENNIAL REVIEW

A feature of considerably greater importance in recent years has been the attempt to estimate size rankings of hydrocarbon accumulations found by new-field wildcats. It is simple enough to determine whether or not a well finds some producible hydrocarbons, but it is more difficult to appraise the size of the find and to determine thereby if it also is to be a financial success. The ratio of commercial successes to failures will reflect the true degree of risk involved in the average exploratory drilling venture. Accordingly, in 1943, it was

Table III. NEW POOL DISCOVERIES. NUMBER OF OUTPOSTS, EXTENSIONS TESTS AND DEEPER (OR SHALLOWER) TRYS WHICH PROVED PRODUCTIVE.

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decided to attempt to rank all new-field discoveries in a 17-State, statistically significant area of the United States in size graduations, as follows:

A = Ultimate recovery of 50 million barrels or more; if gas, 300 billion cubic feet or more;
B = From 25 to 50 million barrels; if gas, 150 to 300 billion cubic feet or more;
C = From 10 to 25 million barrels; if gas, 60 to 150 billion cubic feet or more;
D = From 1 to 10 million barrels; if gas, 6 to 60 billion cubic feet;

Table IV. NEW FIELD DISCOVERIES AND DRY NEW FIELD WILDCATS IN THE U.S.A. - 1964

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E = Less than 1 million barrels; if gas, less than 6 billion cubic feet;
F = Abandoned, although initially completed as a producer.

Rankings in combination gas and oil fields were to represent the sum of gas and oil reserves. Discoveries for the current year are given initial size rankings, and the estimates of three and six years earlier are reviewed and revised as necessary. This procedure has been followed for the past 21 years in the same 17-State area (Table VIII and Fig. 7). The statistics afford a fair measure of the average number of new-field wildcat wells required to find a commercially profitable new field, as distinguished from the number of wells which are successful initially, but which prove later to be non-commercial. This survey affords clear statistical evidence of the increasing difficulty of finding oil and gas in commercial quantities in the United States. Although the number of wildcat dry ho es for each wildcat discovery has remained nearly constant since 1945 (7.83 in 1945, 8.46 in 1964), the percentage of new-field wildcats that discover commercial accumulations of oil or gas has decreased from more than three per cent in the late 1940s to an estimated two per cent in 1964. Thus,

Table V. PERCENTAGE OF EXPLORATORY HOLES DRILLED IN EACH CLASS IN THE UNITED STATES IN 1962, 1963, and 1964

Table VI. FOOTAGE DRILLED IN NEW-FIELD WILDCATS 1945-1964

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on the average, about 50 dry or unprofitable holes are being drilled for each commercially profitable oil and gas field found.

It is well known that size estimates in the year of discovery seldom are reliable and that a considerable amount of development drilling must be done before ultimate recovery can be correctly appraised. The C.S.E.D. has adopted the practice of reviewing new-field discoveries in the 17-State area two times after the year of discovery, at three-year intervals, in order that the final determination of true exploration success ratios will be dependably accurate. The results, corrected after third-year and sixth-year reappraisals, are tabulated in Table VIII and illustrated graphically in Figure 7. (Sixth-year figures, complete to 1958, are presented in Tables IX and X.)

It is recognized that a statistical report is useful only to the extent that the factual data enable accurate analysis of questions important to an industry and to the extent that reports which become a part of a historical series, such as this one, should adhere to definitions, standards, and usages which make each one directly comparable with its predecessor. Thus, the definitions used in this report (illustrated by diagram, Fig. 3) and the method of assembling well counts and other basic figures are the same as in previous years. In the presentation of the analysis of the data, the authors have drawn liberally from the methods of their predecessors cited in the bibliography at the end of this paper.

SUPPORTING DATA

Detailed supporting data for this annual report are filed in the office of the chairman of the C.S.E.D., and arrangements can be made to consult, or reproduce at borrower's expense, these data if greater detail is desired than is given in this summary. The information is available in the form of machine listings, punched cards, or on magnetic tape, because the C.S.E.D. statistics were assembled in 1964 as a computer compilation for the first time.

SUMMARY OF 1964 DATA--CANADA

Exploratory operations in Canada increased to a record high of 1,386 wells (Fig. 10). This compares

Table VII. HISTORICAL TREND OF DISCOVERY RATE IN THE UNITED STATES 1945-1964

Table VIII. NEW-FIELD DISCOVERIES OF 1964 RANKED ACCORDING TO SIZE

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with 1,153 exploratory wells drilled in 1963, 856 in 1962, and 895 in 1961. The largest increase was in western Canada (Alberta, British Columbia, Manitoba, Northwest and Yukon Territories, and Saskatchewan), where 1,284 exploratory tests were drilled in 1964, 1,050 in 1963, and 773 in 1962. Eastern Canada decreased slightly to 102 exploratory tests in 1964, compared with 105 tests in 1963 and 83 tests in 1962 (Fig. 9).

The percentage of all exploratory wells completed as some type of hydrocarbon producer decreased to 25.8 per cent, compared with 30.6 per cent in 1963 and 25.9 per cent in 1962. New-field wildcat drilling increased sharply to 1,003, from 773 in 1963 and 729 in 1962. However, the percentage of new-field wildcats completed as producers continued to fall slightly, from 21.9 per cent in 1962 to 21.2 per cent in 1963 and 19.3 per cent in 1964 (Table XII).

The amount of exploratory footage drilled in Canada increased to 6,211,275 feet, up 589,155 feet from that drilled in 1963, and 2,131,387 feet from that drilled in 1962.

SUMMARY OF 1964 DATA--MEXICO

The decrease in exploratory drilling in Mexico which began in 1961 and continued through 1963

Table IX. HISTORICAL RECORD: NUMBER OF NEW OIL FIELD DISCOVERIES PROVED AFTER SIX YEARS TO BE OF PROFITABLE SIZE

Table X. HISTORICAL RECORD: NUMBER OF NEW GAS FIELD DISCOVERIES PROVED AFTER SIX YEARS TO BE OF PROFITABLE SIZE

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Table XI. TECHNICAL VS NON-TECHNICAL BASIS FOR LOCATION - NEW FIELD WILDCATS U.S. - 1964

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Table XII. -EXPLORATORY DRILLING IN CANADA - 1964

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Table XIII. EXPLORATORY DRILLING IN MEXICO IN 1964

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Fig. 1. EXPLORATORY DRILLING IN UNITED STATES IN 1964

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Fig. 2. EXPLORATORY DRILLING IN 1964

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Fig. 3. CLASSIFICATION OF EXPLORATORY WELLS

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Fig. 4. EXPLORATORY DRILLING IN UNITED STATES BY YEARS 1945-1964 INCLUSIVE

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Fig. 5. AVERAGE DEPTH OF NEW FIELD WILDCATS USA 1945-1964

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Fig. 6. PERCENT OF EXPLORATORY WELLS COMPLETED AS PRODUCERS -- USA 1945-1964

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Fig. 7. PROFITABLE DISCOVERIES AFTER SIX YEAR HISTORY AS A PERCENTAGE OF TOTAL NEW FIELD WILDCATS.

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Fig. 8. COMPARISON OF SUCCESS RATIO TECHNICAL VS NON TECHNICAL LOCATIONS NEW FIELD WILDCATS USA 1945-1964

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Fig. 9. EXPLORATORY DRILLING IN CANADA IN 1964

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Fig. 10. EXPLORATORY DRILLING IN CANADA BY YEARS 1948-1964 INCLUSIVE

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Fig. 11. EXPLORATORY DRILLING IN MEXICO IN 1964

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Fig. 12. EXPLORATORY DRILLING IN MEXICO BY YEARS 1948-1964 INCLUSIVE

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Fig. 13. C S E D DISTRICTS CANADA, MEXICO, USA.

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reversed slightly in 1964. A total of 104 exploratory holes was drilled in 1964, compared with 178 in 1960, 160 in 1961, 131 in 1962, and 99 in 1963 (Fig. 12). Most of the activity was divided between the Tampico embayment, Saline basin, Tabasco region, and the northeastern Mexico geologic provinces (Fig. 11).

Total exploratory footage drilled in 1964 was 936,529 feet, an increase of 14.8 per cent from the 815,881 feet drilled in 1963. The per cent of exploratory wells completed as some type of producing well decreased from 42.4 per cent in 1963 to 39.0 per cent in 1964. However, the number of new-field wildcats that were successful increased from 15.1 per cent in 1963 to 17.2 per cent in 1964 (Table XIII).

SUMMARY OF 1964 DATA--UNITED STATES

A slight reversal of the decline in exploratory operations in the United States occurred in 1964. During the year, 10,747 exploratory tests were drilled, compared to the total of 10,664 drilled in 1963 and 10,797 drilled in 1962 (Table I and Fig. 1). The number of "successful" completions fell to only 1,796 out of the 10,747 attempts, a "success" percentage of 16.71. This compares with 1,978 producers and 18.5 per cent for 1963 (Fig. 6). This is the lowest "success" percentage in the history of C.S.E.D. activities. Experience gained by reviewing past "successes" three years later and again six years later indicates that only a small percentage of the technical "successes" will turn out to be commercial successes. The "success" list of new-field discoveries for 1958 in a 17-State area, for instance, included 789 wells. After six years, only 180, or approximately 2.66 per cent, of all new-field wildcats drilled in 1958 in those 17 states proved to be of sufficient size (one million barrels or equivalent in gas) to be commercial. The United States new-field wildcat record for 1964 indicates that 6,632 wells in this category were drilled, of which 692 discovered were new-field discoveries and nine resulted in successful completions as extensions or new-pool discoveries to some new field opened a short time before by another wildcat (Fig. 4 and Tables IV and V). Outposts, extensions, and new-pool exploratory effort accounted for 4,115 wells, of which 1,095, or 26.6 per cent, were productive (Table V).

A total of 139 re-entries of abandoned new-field wildcats was reported during 1964. Of these, 46 established new oil or gas production. However, only two are credited with discovering a "profitable" accumulation. Both of these discoveries are gas fields.

New-field wildcats located on the basis of scientific reasoning continued to be much more numerous and proportionately more successful than those drilled without known technical guidance. Of the 136 new-field wildcats that discovered a commercial accumulation, 126 had a "technical" basis for drilling, 10 were drilled on an "unknown" basis, and none was drilled on a "non-technical" basis.

ACKNOWLEDGMENTS

The authors extend their thanks to Shell Oil Company, both for permission to engage in this work and for liberal contributions of drafting, stenographic, and data processing talent and time, in particular that of Mrs. Connie Reeves and Miss Carolyn Lilley who served as secretaries to the Committee. Special credit is due Clay Nichols who developed the series of computer programs to produce the various statistical tabulations from the information furnished on individual well tickets by the district committeemen.

The District Chairmen of the C.S.E.D., who assembled the 1964 record for their districts (the area of their responsibility) and the names of those who assisted them are listed below:

Canada

The data for Western Canada were compiled by the Western Canada Oil Scouts Association, with Lahee classification and consolidation by D. L. Hyde of Imperial Oil Company, assisted by G. Chrapko, V. Loughton, J. Mainlander, L. Pobilhushchy, R. Storey, and A. Study. Bruce Sanford of the Geological Survey of Canada supplied the information for Eastern Canada.

Mexico

The data for Mexico were supplied by Petroleos Mexicanos and were classified and compiled by Federico Mina U. of their Geological Department, assisted by Ing. Ernesto Lopez Ramos.

United States

Warren L. Calvert, Ohio; assisted by Allen W. Johnson.
Gerald L. Carpenter, Indiana; assisted by Howard Smith.
Laurence S. Cooke, Jr., and C. S. Sanders, Texas District 9; assisted by R. W. Archibald, Patricia M. Caviness, and J. W. Jeffers.
Henry C. Dean, and John K. Rabenold, Texas District 3, assisted by Ed Lipp, Dick Millican, Frank La More, Lee Newell, Tommy Thompson, and Rolf Varland.
Herbert D. Duey, Northern Rocky Mountains; assisted by Russell Baughman, D. A. Bentzin, R. F. Gosman, B. E. May, and William Tutten.
Garland D. Ells, Michigan.
Don E. Gednetz, Arkansas; assisted by Max G. Hare and Leonard E. Vaughn.
Eugene A. Gibson, Southern Louisiana; assisted by A. M. Cassell, H. E. Cunningham, W. K. Dehoe, R. P. Sevier, W. W. Walker, and W. H. Wise.
P. N. Glover, Rocky Mountains Central.
Fred Goodwin, Texas District 1; assisted by Bob Gowdy and Bob Meier.

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Donald L. Hansen, Oklahoma; assisted by Philip A. Chenoweth.
K. C. Havenor, New Mexico; assisted by Fred Tyner.
William T. Head, North Louisiana; assisted by Byrd Berman, Dick Grambly, and George E. Guynes.
Richard N. Holden, Texas District 2.
L. M. Hopkins, West Virginia; assisted by R. E. Bayles and W. H. Henry.
Ralph L. Horak, and Roy M. Ross, Texas District 7C and 8.
Milton Hruby, Atlantic States Southeastern.
John Ireland, Texas District 7B; assisted by Mrs. Martha Johnson.
Thomas A. Kuhn, East Coast and New England; assisted by N. B. Donovan, Donald O. Kauss, W. L. Kreidler, Oliver W. Lineberg, Richard A. Meury, H. G. Richards, and Anthony D. Shinn.
Orland Lacer, Texas District 10.
Richard N. Mercurio, Rocky Mountains Southern; assisted by Lee Eicher and Marvin Keller.
Holman C. Milhous, Tennessee.
E. B. Parmelee, Gulf States Southern.
E. Harold Rader, West Coast; assisted by M. C. Barnard, Jr., C. J. Edmundson, L. B. Graff, H. L. Popenoe, Jr., Dale Rodman, Pete Smith, and Pete Wygle.
George R. Thomas, Eastern Kentucky; assisted by Edmund Nosow.
Jacob Van Den Berg, Illinois; assisted by Hubert M. Bristol, David Duncan, and Elton E. Hill.
John W. Vineyard, Texas District 5 and 6.
Les P. White, Texas District 4; assisted by Al Alvarez, Cline D. Johnson, Al. V. Jones, G. Rogge Marsh, and Horace C. Steele.
Edward N. Wilson, Western Kentucky; assisted by William D. Rose.
Richard O. Witten, Mid-Continent Northern; assisted by Norman Knapps, Robert Newman, and Victor Veroda.