This paper discusses the developments during the year 1940 in the South Texas area and suggests that the collapse of foreign markets caused pipe-line proration and local price cuts.

Twenty-eight new producing areas were found during the year. Drilling was slightly under the 1939 rate, and geological exploratory work was greatly reduced.

Four wildcat wells were completed in Wilcox sands, three producing gas and condensate and one producing oil with water. None of these discoveries appears to represent reserves of consequence.

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Condensate production reached 8,800 barrels per day, and nine plants were operating on a repressuring or a recycling basis.

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