OIL & GAS: Profits Down the Well

OIL & GAS

Through the marshes of southern Louisiana 14 months ago, an oil-drilling rig was towed into position and a 20-in. drill casing firmly planted in the muck. Fort Worth Oil Drillers Sid Richardson and Perry Bass, in a joint project with Freeport Sulphur Co. and Houston Oilman John W. Mecom, started drilling with high hopes of tapping a new field near Louisiana's rich Lake Washington field. But as the drill bit downward—to 5,000 feet, 10,000 feet, 15,000 feet—their hopes sank as fast as their costs rose. Drillers had to battle hole temperatures up to 350°, pressures up to 20,000 lbs. per sq. in. Bills for a special heavy drilling mud skyrocketed. It took eleven hours to pull the pipe out and replace a drill bit. Last November, when costs reached $8,000 daily, the partners considered abandoning the well.

But they kept going, pushed the pipe down more than four miles to 22,570 ft., and thereby made Louisiana Land and Exploration Co. Well 1-L the world's deepest well.* Last week, after the three partners had spent a total of $2,450,000 on it, 1-L came in, was flowing about 200 bbl. a day. If it leads to a big new discovery on the 10,000 acres they have under option, the partners can consider their big stakes well invested. But by itself, 1-L is no big profitmaker. After paying royalties to the landowner, state taxes, piping and shipping expenses, the partners will clear about $350 daily on the well at present prices. At that rate it will take them more than 19 years just to get their money back.