Minute globules of oil occur in water pumped from Lissie and Beaumont sands of the later Cenozoic of the Texas Gulf Coast. Such oil was observed in 27 per cent of the wells completed in these formations which were visited in San Patricio and Nueces counties.

The conclusion is reached that the oil is probably indigenous to the water sands and disseminated in them in minute quantities.

The oil seems to be petroleum. Its films resemble those of Gulf Coast terpene. In a part of the area it is associated with free sulphur in as many as 45 per cent of the wells containing oil.

It is not known whether oil in such slight concentration occurs in sediments at the time of their deposition. This oil in very late Cenozoic beds may represent the type of the most recent formation of petroleum in Texas. The evidence presented is believed to admit such a conclusion to serious consideration. It is recognized that such an assumption rests on a series of postulates not fully proved to be true, but it indicates an approach to an important phase of the problem of the origin of petroleum. If, however, vertical migration of gas into these beds has occurred, the oil (terpene?) may have come up vaporized with the gas. Terpene vapor is commonly associated with the natural gas of the area.