Although drilling activity decreased slightly in South Texas during 1965, there was a substantial increase in production of gas and gas liquids. Total drilling decreased 7.7%, which included a 10% decline in development wells and a 2.2% decline in exploratory wells compared with 1964. Geophysical activity decreased 3.2% in 1965, and oil production declined slightly. Increases took place only in production of gas (up 14.7%) and gas liquids (up 30.9%). Exploration for the deep Jurassic, Edwards (Cretaceous), and Wilcox (lower Eocene) production continued with little success. The shallow lower Eocene (Poth Sand) play continued with better results; however, as in the past, most exploration and discoveries were in the more prolific Oligocene-Miocene trend. The most significant increase in activity during 1965 resulted from offshore leasing, seismic work, and drilling. This high level of activity probably will continue.