Consumption has been greatly increased by shipments of crude and fuel oil to the Atlantic Coast via the Panama Canal. Existing differentials in prices and transportation costs between California crudes and the so-called Mexican light crude are enabling California marketers to ship oil in quantities estimated as high as 50,000 barrels daily. This condition has created a new outlet for California petroleum.

California production still leads consumption by about 2,000,000 barrels monthly. In addition it is estimated that 2000 wells, with a normal output of about 72,000 barrels, are shut down. A large part of the oil shut in is heavy grade, less than 20 degrees Baumé. Oil in storage at the end of December, 1922, was about 1,000,000 barrels in excess of the storage of May, 1915, the previous high point for stored oil. Production at the close of 1922, not including potential production shut in, was 170,000 barrels in excess of the average production increase over the period 1911 to 1921, inclusive, and consumption was 35,000 barrels in excess of the average consumption increase over the same period.

Drilling was concentrated in the Huntington Beach, Long Beach and Santa Fe Springs oil field during 1922 and greatly curtailed in the other fields, especially in the San Joaquin Valley. Very few wells are being drilled in the oil fields of Fresno, Santa Barbara and Ventura counties. On the whole, however, more new wells were reported to the State Oil and Gas Supervisor in 1922 than in 1921. 1439 new wells were reported in 1922 and 1287 new wells in 1921. 799 new wells, 55 per cent of the drilling of the State, were reported in the three new fields: Huntington Beach, 193 wells, Long Beach, 348 wells, and Santa Fe Springs, 258 wells.

The present situation of overproduction in California is due primarily to the competitive drilling of offset wells on or adojining small property holdings. In the development of each of the three new fields town-lot drilling has played a predominating part. Town-lot drilling should not be confused with close drilling or small acreages per well. The spacing of wells in several California fields, such as Kern River and McKittrick, are on an average basis of 2.0 to 2.4 acres per well. In these fields, however, are ten, twenty and forty acre tracts, or larger, in which wells were spaced according to what the operator considered was the most economical plan for extracting the oil.

In town-lot drilling every well is in a sense an offset well. The size and shape of the property controls the spacing of offset wells. They may be only 50 feet apart. Offset wells are not drilled so much for the purpose of developing and producing that oil to which each operator has an unhindered right, within his own property lines, as to get the oil lying under each side of the boundary line, which will move to the well first drilled into the oil sand. This condition is one of the recognized fundamentals of oil field development, and where properties are leased, the leases carefully safeguard each lessor's interest opposed to the adjoining lessor. The necessities of drilling offset wells, to meet lease requirements, is therefore, one of the greatest contributory factors to forced drilling where small property ownerships are involved.

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Intensive offset drilling necessitates abandonment of the principle of leaving certain quantities of recoverable oil in its underground storage until the maximum profit can be obtained, and then bringing the oil to the surface by drilling the wells according to established oil field

practice, as to spacing and careful drilling methods. Wells are raced to production and each new producing well calls for a number of offsets. In the town-lot oil fields wells have been drilled as close as three to an acre. Town-lot drilling brings rapid recovery of flush production. For the industry as a whole it means serious over-production. For the operator drilling in congested areas there is not enough oil underground to yield a profit for all against the cost of each well, the productive. unit.

The rate of production of California petroleum has its high and low points, like every other oil producing district, in the inexorable workings of the law of supply and demand. It would seem possible, however, by careful study of development problems and intelligent effort, to level off some of the extremely high and low points in the curve. Sometimes, when oil is badly needed, as in the war period, operators do not know where to get it, or how best to get the maximum output with minimum use of money, men and materials. In the present condition much oil is available but it is being produced like a big gusher out of control, because there is not the proper economic machinery to regulate the flow.

It is possible that some of the economic evils of town-lot drilling could be eliminated by carefully considered legislation. Such legislation should recognize the equitable right of every property owner in the oil under his land, whether a small lot or ten acres, and should rigorously prevent the exploitation of California's most valuable mineral resource by the stock jobbers and "uniteers.”

From December 9, 1922, to and including January 13, 1923, the following new wells were reported as ready to drill:

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15

14

8

14

15

14

35

11

11

11

11

29

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SPECIAL ARTICLES.

Detailed technical reports on special subjects, the result of research work or extended field investigations, will continue to be issued as separate bulletins by the Bureau, as has been the custom in the past.

Shorter and less elaborate technical papers and articles by members of the staff containing much information that will add to the permanent value of the Monthly Chapter are included in each number of 'Mining in California.'

It is anticipated that these special articles will cover a wide range of subjects both of historical and current interest; descriptions of new processes, or metallurgical and industrial plants, new mineral occurrences, and interesting geological formations, as well as articles intended to supply practical and timely informtion on the problems of the prospector and miner, such as the text of new laws and official regulations and notices affecting the mineral industry.

PRIMARY AND SECONDARY GOLD CONCENTRATIONS.

By CHAS. S. HALEY.

Concentrations of placer gold may generally be divided into two classes-those that are original and those that result as a secondary concentration of original ones. Under the first head we have primary stream bed erosion. A stream that is wearing down to its basal plane through a mountain range will in the course of many thousand years concentrate and segregate material from pockets and seams, as well as the larger ledges, extending through an enormous mass of ground. Many billions of tons of material may be sorted over by aerial and aqueous action and the residue thereof amounting to anywhere from 2 to 50 per cent of selected portions of the mass will be concentrated in the narrow gorge of the stream.

In the course of this concentration the most of the soluble constituents of the rock mass are removed: Pyrites, galena, and other sulphides are broken down and dissolved by the descending surface waters. Gold associated with these sulphides, being insoluble, simply descends by gravity to the lowest portion of the trough of the channel, in many cases taking ages of time to reach the bottom level. This solvent action is largely assisted by intensive frost conditions and the subsequent heat of the sun. The most insoluble constituents of the rock are clay and quartz, and as a rule these two will be found represented in all types of gravel

Another type of primary concentration is that due to the erosion of a dike in place. Most intrusive dikes upon cooling have been cracked and the cracks have filled with stringers and cross veins running in all directions. If the magma beneath has been gold-bearing, these stringers often carry gold in considerable quantity. As the whole dike mass is planed off by atmospheric and water action, regardless of any one particular stream channel, a concentration will often occur on flats and plateaus which are not far removed from and often directly represent the original source of, the concentrated material. At Fresno, in the United States of Colombia, the writer has seen concentration of this sort from stringers in granite. The gravel consisted of about five feet of sub-angular soft granitic material and sand. Underneath these, torrential rains prevalent in the tropics had softened the granite for