1. Yesterday you mentioned that the Government had won the suit against the Southern Pacific. Mr. S. W. WILLIAMS. As to the 6,000 acres in reserve No. 1? Mr. S. W. WILLIAMS. In the court of appeals now, and probably will be heard in the near future. Senator PHELAN. That went off on what point? Mr. S. W. WILLIAMS. On the ground of fraud. Senator PHELAN. That is, they had knowledge that they were oil lands when they filed on them? Mr. S. W. WILLIAMS. Yes, sir; took them for that purpose; that is what we alleged and tried to prove. Senator PHELAN. And you proved that in the lower court? Mr. S. W. WILLIAMS. To the satisfaction of the lower court. Mr. S. W. WILLIAMS. Judge Bean, from Oregon, went down and tried that. Senator PHELAN. On what point was the appeal made? Mr. S. W. WILLIAMS. I assume the court found the facts against them. There is no question of law in that case. Senator PHELAN. I have always assumed, from my meager knowledge of the litigation, that that was a closed incident; that the Southern Pacific had lost its title there. Mr. S. W. WILLIAMS. We have a decree canceling the patents, but the company has taken an appeal, and, of course, we are not exercising any right of ownership over them. Senator PHELAN. Where will that be heard? Mr. S. W. WILLIAMS. I presume in San Francisco. The CHAIRMAN. In the suits you have brought, in how many instances have injunctions been issued or receivers appointed in these two naval reserves? Mr. S. W. WILLIAMS. I am not sure that in the first cases, A31 and A48 the two cases against the Associated Oil Co. and the North American Oil Co.-that receivers had been appointed, although my data did not go that far. We have had receivers appointed in practically all of the withdrawn suits, Senator, except in a few cases where it seemed property was in no danger of being wasted; but most of our withdrawn cases do not involve lands in the naval reserve. We have 27 of them, and only a few of them are in the naval reserve. The CHAIRMAN. I would like to ask Mr. Williams how many wells are in operation at the present time in Naval Reserve No. 2? Mr. W. A. WILLIAMS. From 315 to 350. Representative LENROOT. How many on unpatented lands? Mr. W. A. WILLIAMS. One hundred and forty on unpatented and clear-listed lands. Representative LENROOT. Has any survey been made and maps prepared showing the exact location of these wells-the distances apart? Mr. W. A. WILLIAMS (producing maps). These are maps made from actual surveys. Representative LENROOT. You have the actual figures? Mr. W. A. WILLIAMS. We have the actual figures. I might say the location of wells shown on this map were taken from maps which were prepared from actual survey. The CHAIRMAN. Can you give the sections in which wells are being operated at the present time? Mr. W. A. WILLIAMS. Yes. By sections? The CHAIRMAN. Yes. Read them off, so they will go into the record. Mr. W. A. WILLIAMS. In Naval Reserve No. 2 wells are being operated on sections 20, 22, 25, 26, 27, 28, 33, 34, 35, and 36, township 31 south, range 23 east; and in sections 31 and 32, in township 31 south, range 24 east; sections 1, 2, 3, 12, and 13, in township 32 south, range 23 east; in township 32 south, range 24 east, sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15, 16, 17, and 18. Commissioner TALLMAN. There were two sections you left out. The CHAIRMAN. Call off the sections in which there are no producing wells. Mr. W. A. WILLIAMS. This is in naval reserve No. 2, and the sections upon which there are no producing wells are 1, 8, 9, 15, 16, 17, 18, 23, 29, in township 31 south, range 23 east; section 30 in township 31 south, range 24 east; section 11 in township 32 south, range 23 east; sections 2, 3, and 13 in township 32 south, range 23 east; and section 18 in township 32 south, range 25 east. Representative LENROOT. May I ask you this question: Would it be possible to prepare for the committee an estimate of the ultimate production of the wells now being operated, assuming no other wells were drilled upon these unpatented lands and an estimate of how much of a reserve would be left for the Navy in production if that were done? Mr. W. A. WILLIAMS. That would be pretty hard to glo without more information than I have available. Representative LENROOT. You can estimate as to the total produc tion? Mr. W. A. WILLIAMS. I can estimate as to the total production. Representative LENROOT. Have you any estimates as to the total production of each well? Mr. W. A. WILLIAMS. Some wells have produced a large amount of oil in that reserve. Representative LENROOT. You have estimates as to the average drainage, have you? Mr. W. A. WILLIAMS. The average drainage varies, depending on the character of the sand; it varies from one section to the other, and from one location to the other. A well has drained as much as 400 acres in this field. Representative LENROOT. There have been some tests or experiments made in drainage? Mr. W. A. WILLIAMS. None that I know of. Representative LENROOT. Of water flowing into one well from another? Mr. W. A. WILLIAMS. Yes; that has happened in the case of water on section 28. Water was allowed to enter the sands from onę well in here [indicating] and within a short time that water spread to almost the entire section, probably passing through a gas or barren sand--a sand that was very porous. Representative LENROOT. So that in that particular case the one well might drain that entire section; is not that so? Mr. W. A. WILLIAMS. A well could ruin an entire section. Representative LENROOT. It would not necessarily follow that oil would pass through. Of course that is heavier? Mr. W. A. WILLIAMS. Yes. The CHAIRMAN. What do you mean by "well could ruin an entire section"? Mr. W. A. WILLIAMS. By allowing water to get into porous sand and from that into oil sand. Senator PHELAN. One negligent operator might ruin a large area? Mr. W. A. WILLIAMS. He might ruin a large area. The CHAIRMAN. Now take up Naval Reserve No. 1, and give the producing wells there and also the sections upon which there are no producing wells. Mr. W. A. WILLIAMS. In Naval Reserve No. 1 there are no producing wells. There are three wells which have entered the oil sand, but they have been shut down and are not producing. Commissioner TALLMAN. Are the Caribou wells producing? Mr. W. A. WILLIAMS. They were capable of producing. They were located on section 24 and section 26 in township 30 south, range 23 east, and on section 30, township 30 south, range 24 east. The CHAIRMAN. And outside of that are there any wells drilled in that naval reserve? Mr. W. A. WILLIAMS. There are a large number of wells that have been drilled to various depths. The CHAIRMAN. What are the depths that have been drilled, outside of the ones in the oil reserve? Mr. W. A. WILLIAMS. Four thousand eight hundred and fifty feet, on section 12, in township 31 south, range 24 east. The CHAIRMAN. Do you know anything with regard to the geological conditions in Naval Reserve No. 1? Mr. W. A. WILLIAMS. Yes, sir. The CHAIRMAN. What is the known oil area there now? Mr. W. A. WILLIAMS. The known oil area? The only data we have is upon the wells that have been drilled into the oil sand. The CHAIRMAN. What area does that demonstrate? Mr. W. A. WILLIAMS. Roughly, I have estimated, offhand, that that demonstrates approximately 12,880 acres. Mr. FINNEY. That is oil-bearing land? Mr. W. A. WILLIAMS. That is probable oil-bearing land. That estimate is based upon the geological structure and upon the results obtained in the three deep holes that penetrated the oil sand. Mr. FINNEY. How deep are those holes that went into the oil sand? Mr. W. A. WILLIAMS. Those holes that went into the oil sand-the one on 26 was around 4,000 feet, and the one on 24 was around 3,900 feet, and the one on 30 was around 3,900 feet. I might say that the oil sand was encountered around 3,000 feet, and they went on below, expecting to find other sands. Commissioner TALLMAN. Is that 4,800-foot well that you spoke of within the area that you figure is oil bearing? Mr. W. A. WILLIAMS. No; that is very much outside, and very much farther down on the structure. The area I have outlined as oil bearing is on top of the structure, on the crest of the dome. Commissioner TALLMAN. Has any well gone down to the oil sand in the area you figured to be oil bearing without striking oil? Mr. W. A. WILLIAMS. No, sir. Assistant Secretary ROOSEVELT. How many acres do you consider to be proved in reserve No. 1? Mr. W. A. WILLIAMS. I would not say "proven"; I would say probable." Assistant Secretary ROOSEVELT. Out of the other estimate of 2,470 acres? Mr. W. A. WILLIAMS. No, sir. The CHAIRMAN. When did you make an examination of that naval reserve? Mr. W. A. WILLIAMS. I first made an examination of that naval reserve in January and February of 1910. The CHAIRMAN. For whom did you make the examination? Mr. W. A. WILLIAMS. For Associated Oil Co. I was chief geologist for the company at that time. The CHAIRMAN. Mr. Williams, what are your qualifications and experience as a geologist? I am personally not acquainted with you is the reason I ask that question. Mr. W. A. WILLIAMS. I was on the Geological Survey as field assistant in 1903. I might go back. I graduated at the Stanford University in geology and mining in 1903. I was instructor in geology there in 1903 and 1904, except for the period I was on the Geological Survey in 1903, that work was in the Coeur d'Alene district, Idaho. Then I followed mining up until 1908 in various capacities. In 1908 I entered the employ of the Associated Oil Co. as geologist. In the latter part of 1910 I was made chief geologist of the Associated Oil Co. In 1912 I was consulting geologist for the General Petroleum Co., and in the first part of 1914 I made a report on all the holdings of the Union Oil Co. for the English capitalists. On completing that report in June, 1914, I came with the Bureau of Mines as Chief of Petroleum Division. The CHAIRMAN. And you occupy that position now? Mr. W. A. WILLIAMS. I occupy that position now. The CHAIRMAN. How much oil do you estimate is in the naval reserve No. 1? Mr. W. A. WILLIAMS. I have estimated there is about 128,800,000 barrels. The CHAIRMAN. Have you ever made any estimate of the oil contents in naval reserve No. 3? Mr. W. A. WILLIAMS. I have not. The CHAIRMAN. Have you made any estimates of the oils in any of the other naval reserves? Mr. W. A. WILLIAMS. I have an estimate here for No. 2, which is 380,200,000 barrels, of which I have estimated 80,000,000 barrels have been produced to date, leaving 300,200,000 yet to be produced. I think that estimate is very conservative. Assistant Secretary ROOSEVELT. Do those estimates include the Southern Pacific lands, also? Mr. W. A. WILLIAMS. Everything within the reserve. Senator PHELAN. What is your judgment as to value of shale oil lands? Mr. W. A. WILLIAMS. Shale oil lands are something, of course, for the future. The average ton of shale will probably produce about a half a barrel of oil, of which half of that will be light products and half will be heavy products. Assistant Secretary ROOSEVELT. Mr. Williams, is it not true your estimate of No. 1 is based more on the geological formation than on the actual proved oil; that is, the oil discovered through those three wells? Mr. W. A. WILLIAMS. I have based it largely on the character of the sand and the amount of oil discovered in the three wells already drilled; also on the geological conditions. You have to consider all factors, because there is not enough information available from the wells alone. Senator PHELAN. Have estimates of geologists been borne out by the facts in other oil fields in other parts of the country? Mr. W. A. WILLIAMS. Some geologists' estimates have been borne out and some have not. Senator PHELAN. Have any been exceeded? Mr. W. A. WILLIAMS. I do not presume that many have been exceeded. Senator PHELAN. The Texas field, as I understand it, contained vast deposits of oil, but was destroyed by water, was it not? Mr. W. A. WILLIAMS. It may have been in some cases. The Beaumont field, however, has the largest production per acre of any fields in this country. They have produced something like 200,000 barrels per acre in the proven territory. Senator PHELAN. What did the estimators estimate in advance to the contents of that field? Mr. W. A. WILLIAMS. I do not believe there were any estimates made at that time. I might say, for your information, that my estimates on oil content are based upon what actual properties have been doing in that field. When I was chief geologist for the Associated Oil Co., we kept a record of the production by months from all properties. We plotted those records on curves and established what we considered to be a uniform decline, and from that determined the productions per acre which lands ought to produce, and in that way I have attempted to arrive at the estimates I have given to the committee. I think you will find them conservative. Senator PHELAN. The Lost Hills is outside of the naval reserve? Mr. W. A. WILLIAMS. Outside of the naval reserve. Senator PHELAN. Do you know anything of the Lost Hills? Mr. W. A. WILLIAMS. I do, Senator. I made a report on that field for the Associated Oil Co. Senator PHELAN. I understand that some company has purchased very largely in the Lost Hills District with no intention of immediate development. Mr. W. A. WILLIAMS. I know nothing of that. Assistant Secretary ROOSEVELT. Is it not so, Mr. Williams, that the geologists in regard to reserve No. 1 first made an estimate of 300,000,000 barrels of oil? 74260-17-3 |