Oil: Slanted Larceny

No oil strike in the gaudy history of Texas has inspired more plundering than the 43-mile East Texas field first tapped in 1930 and still credited with more reserves (3 billion bbl.) than any other in the nation. It was to stop East Texans from pumping oil out of their wells faster than U.S. consumers could use it that Congress in 1935 passed the Connally Hot Oil Act.* Last week, state investigators—with 30 Texas Rangers on hand to protect them from reprisals—were turning up case after case of outright piracy in the East Texas field. It was done with slanted wells, which enable greedy independent oil operators to suck the oil out of their neighbors' pools.

The tip-off came when a Shell Oil drill crew found rotary mud gushing from one of its wells. Rotary mud is forced down new holes to cool drill tips, and the Shell crew concluded that another drill had pierced its well shaft. A search quickly turned up the pirate rig—3,000 ft. away over the piny hills. At Shell's complaint, the Texas Railroad Commission, which regulates oil production in the state, ordered a crew of engineers into the field.

Surveying 15 wells chosen at random, the engineers found 13 aslant by 40° to 56°-enough to carry them comfortably into nearby producing pools owned by major operators. "You can draw your own conclusions," barked Commission Chairman William J. Murray, as he ordered the survey broadened to cover the wells of 60 East Texas operators.

The Enthusiasts. Before the investigation is over, Murray's engineers are likely to need all the protection that the Rangers can give them. Investors have innocently put up to $6,000,000 into wells that may turn out to be slanted. If the wells do prove to be slanted, they will be capped by the commission and the investors will lose their stake. Evidence is also beginning to turn up of bribes to surveyors and to commission employees to ignore slanting.

About the only East Texans enthusiastic for the investigation are the major operators, who under a quota system are allowed to pump only 20 bbl. per well daily—and that only eight days a month.

Smaller operators, by hooking several dummy wellheads to each slanted pirate well, have been able to keep production at each wellhead under 20 bbl. a day, and therefore to qualify for the marginal operator's allowance of 30 pumping days a month. If illegal operators could be prevented from putting all this extra oil on the market, the commission might well be able to grant big operators a ninth day's pumping.

Big Brag. Last week Texas Attorney General Will Wilson filed the state's first suit against one alleged pirate. At the same time, three big operators—Humble, Continental and Pan American Petroleum —entered suits totaling $1,700,000 against eight independents who, the companies charged, had stolen their oil. The Railroad Commission predicted that it might eventually find as many as 300 slanted wells pumping out $30 million worth of purloined oil a year. Said Attorney General Wilson: "This will turn out to be one of the biggest thefts in Texas history." In the land of Billie Sol Estes, that was quite a brag.