Even from the beginning, the discovery well gave a hint that the Permian Basin was going to be a major oil province. That well was the Santa Rita #1 – Santa Rita, the patron Saint of the Impossible.
There are times when exploring and operating in the Permian Basin certainly needed a patron Saint.
To fully understand the history of oil discoveries in the Permian Basin, one needs a broad understanding of its geology.
The area encompassing the Permian Basin, from Ordovician through Mississippian time, was a large intracratonic basin, the Tobosa Basin, with the deepest part located just to the west of Midland.
Uplift at the end of the Devonian and early Mississippian exposed some sections to erosion.
Shelf margins developed in the Mississippian, and with the collision of the South American plate with the North American plate at the end of the Mississippian into the Wolfcamp, tectonic activity started and the Central Basin Platform was uplifted in the center of the Tobosa Basin, creating the Midland Basin to the east, the Delaware Basin to the west and the Val Verde Basin to the south.
The uplifting of the Central Basin Platform during the Pennsylvanian and Wolfcamp times were conducive for the growth of reefs and building shelf margins on the edges of the Delaware and Midland basins, with the central part of each basin being filled with clastic and deep water deposits during this period.
The last major geological development was the Permian Reef Complex, which developed rimming the Delaware Basin.
The Sisters Knew Best
The early exploration efforts in the Permian Basin started in Mitchell County on the basin’s eastern shelf, with a 10 barrel-a-day well that opened the Westbrook Field in 1920.
This set off a frenzy of activity in the basin looking for the “Big Lime,” or as we know it today, the Grayburg/San Andres formation. This became a very attractive play, especially since the University of Texas Land System had large amounts of leases promoters could get cheap for drilling.
In 1921 the Santa Rita #1 was drilled at a place called Texon – and many stories have been told as to why this location was picked.
One story is that they had to spud a well by midnight, so they offloaded the drilling equipment from a train and were taking it to the location when a wheel broke on the horse drawn wagon. Running out of time, they set up the cable tool rig and drilled the water well to extend the lease.
The more accepted story is that Hugh H. Tucker, a self-taught geologist, had mapped a structural anticline there nine miles wide and 30 miles long.
The Texon Company, headed by Frank Pickrell, decided that instead of drilling the location two miles from the train track they would drill 100 feet from the tracks for convenience. The water supply well was drilled to save the leases and then the Santa Rita was spud in August 1921.
Pickrell reportedly climbed to the top of the rig and sprinkled rose petals that were given to him by a group of Catholic Sisters from back east, who had invested in the drilling deal and told him to christen the well after the patron Saint of the Impossible, Santa Rita.
The Santa Rita #1 blew onto the scene in May 1923. It was possible.
As a side note, story has it that the original location recommended was a dry hole. Maybe there was some divine intervention from the Sisters?
New Methods Arrive
Early activity in the Permian Basin was mostly confined to where surface mapping, using Cretaceous outcrops, could give indication where structures were in the subsurface.
Transcontinental in 1923 sold a deal to the Ohio Company, based on defined surface structures; to earn an interest they had to drill three wells within three large lease blocks in Crockett, Upton and Pecos counties. It was said that no oil existed west of the Pecos River, and there are stories of people having stated they would drink all of the oil found west of the Pecos River.
(This could explain why the Ohio Company drilled all three wells on the leases east of the Pecos.)
After the drilling of three dry holes, these leases were surrendered. The leases west of the Pecos were about to expire when a geologist named Frank Clark convinced the Ohio Company to let its subsidiary, the Mid-Kansas Oil Company, drill the feature west of the Pecos River.
On Oct. 28, 1926, the discovery well for the billion barrel Yates Field announced to the world that the Permian Basin was a major oil and gas producing area.
In 1928 the deepest well in the world was drilled in the Big Lake field to a depth of 8,525 feet. This well was productive in the Pennsylvanian and the Ordovician, opening up a whole new round of exploration.
With these deeper targeted formations – and since large parts of the Permian Basin are not conducive to surface mapping – the use of geophysical methods such as gravity, magnetic and seismic could be used to identify structural features for drilling.
Not coincidentally, several stories were published about windows being broken in West Texas towns by seismic crews doing surveys with dynamite.
In 1938, Gulf drilled a well into the large Pennsylvanian Reef complex known today as the Horseshoe Atoll. Even after testing the Pennsylvania section and making oil and water, Gulf did not understand what it had drilled and plugged the well with no further exploration in the area. Humble drilled 200 feet of reef while drilling an Ellenberger (Ordovician) test and never tested its well in the reef, which is now within the Kelly Snyder oil field.
The first discovery in the reef came in 1948 by Sun, and in 1950 Standard re-entered the Humble well and extended the now-developing Kelly Snyder Field.
The first commercial producer was made in the Spraberry Formation within the Midland Basin in 1948. The Spraberry became a promoter’s dream – it was almost impossible to drill a dry hole and it covered over 800,000 acres, which is almost the entire Midland Basin.
The Spraberry formation would see a lot of drilling – and become the engine for a lot of personal wealth among small operators in Midland, as well as the foundation for the beginning of companies such as Pioneer Natural Resources.
Pictures and stories abound of celebrities investing in Spraberry wells and promoters using photos of scantly to unclothed women in promotional material, while the Spraberry got the moniker of the largest non-commercial oil field in the world.
Good Times, Bad Times
In the 1950s, the basin saw lots of drilling for both the Pennsylvanian and the Devonian, with large fields being discovered in both of these formations.
The Dora Roberts field, located south of Odessa, was leased by Cities Service Oil, based on the fact it had a large structural field to the north (Headlee) and to the south (Pegasus) and, best of all, it was available for leasing.
With all of this drilling and the associated gas production, stories are told of driving in the Permian Basin on the darkest of nights without headlights as the skies were lit by the flares from all the oil production.
As Midland and the Permian Basin saw major companies leave the area in the 1950s, the Permian was to set yet another depth record in the late ’50s, when the Phillips University EE #1 was drilled to 25,340 feet. This set off the next big round of exploration, this time not for oil, but for gas.
Large gas fields were found in the Delaware and Val Verde basins – one of the largest was the Gomez field. Early seismic showed this feature, but because of the depth and overall size – 10-20 miles across – it was hard for anyone to believe it was as large as the early seismic showed. Most lines came off of the platform and stopped 5-10 miles onto the structure and did not show the faulting down into the basin.
Several of these deep gas fields on the early 2-D seismic would not show the crest of the anticline. Geologists and geophysicists would make structure maps using the dips from dipmeters on the flanks of the structures if available or take seismic dips from 2-D lines and create structure maps.
After yet another bust in the early 1980s – with most major companies pulling out of the Permian Basin – the late ’80s and early ’90s were dominated by small start-up companies (i.e. geologists, engineers and landmen who became unemployed in the bust) using 3-D seismic to hunt for smaller targets in both the deeper Devonian and Ellenberger as well as the pinnacle reef in the Pennsylvanian.
Most experts were writing off the Permian Basin – it had seen its better days and was just an old mature basin without much more to offer. The major companies that were still active in the basin were managing older fields and trying to get as much oil as they could out of them as they could through secondary and Tertiary recovery methods.
The Never Ending Story
As with any oil producing area, there are stories of someone drilling up their last dollar or dulling a bit and making a major discovery. The Permian Basin also has the stories of ingenuity, luck and perseverance on the part of strong men and women who believe in their ideas.
One of the greatest stories about the Permian Basin is the one happening now.
In the late 1990s and early 2000s a couple of companies began drilling the Wolfcamp section in the Midland Basin looking to commingle the Wolfcamp Formation with the Spraberry Formation. The Railroad Commission of the state of Texas allowed this commingling, and the Wolfberry play of the Midland Basin was off and running.
Operators currently can commingle from the Clearfork to the Mississippian – which has lead to the commingling of the Bone Spring with the Wolfcamp in the Delaware Basin (“Wolfbone”) and the Wolfcamp with the Clearfork in the southern Midland Basin (“Wolffork”).
This is only half of the story; with horizontal drilling technology, the basin has become a hot spot for horizontals wells with the Wolfcamp Shale, Avalon Shale and Cline, to name just a few of the hot horizontal plays being drilled in the Permian Basin.
Places that have not seen leasing in many years are now hot beds of activities. Hotel rooms are hard to come by in Midland, and getting into the courthouses in the counties affected by these plays to check title records is difficult.
Last year, one courthouse in the northern part of the Permian Basin even saw landmen fighting over the title books.
The Permian Basin is once again a hot bed of activity, with major companies obtaining large acreage positions and drilling wells. This is a story of how technology, opportunity and good commodities prices have become the Fountain of Youth for the Permian Basin.