Volume 3, Number 4 - April 24, 2003
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Sublette County's early oil & gas activity
With tax revenues from natural gas and oil topping 90 percent for the 2002-2003 fiscal year, residents of Sublette County are well aware of the oil and gas industry's current economic value. In addition, many employment opportunities derive from the industry's current efforts to drill additional wells, as witness the planned expansions in the Jonah Field and the Pinedale Anticline, and projected coalbed methane exploration.
Jobs and the interests of many individuals and companies have been intertwined over a great many years with the ups and downs of oil and later natural gas production. Going back to 1847, heavy oil from a seep at Fossil and Spring Valley was reported to have been used for greasing wagons, and ranchers and cowboys noted in 1892 that oil from a seep at Birch Creek was seen on horses' hooves.
Geologists A. G. Burritt and Christian Vrang had surveyed the east side of the Wyoming Range early in the 20th century and predicted a very positive outlook for oil production. Natural gas here at that time had no value - at least there was no market. Four rigs were exploring near LaBarge in 1902 and several around Opal. Beneficial Oil was exploring by 1907.
Activity really began taking off in earnest during the late teens. Charlie Budd and Charles Lackey were busily promoting the Dry Piney area and brought in Cretaceous Well No. 1, but bad luck seemed to dog their efforts. W. D. "Bill" Newlon was drilling, and the Lincoln Idaho No. 2 well reported a "good flow" of oil in 1919. Everything was off to the races by the 1920s.
Right at this time, turmoil also developed in the area when in 1920, the federal government changed the method governing oil and gas drilling and ownership rights from placer law to a lease system. Prior to that time, placer mining law, such as that used for gold, covered the rights to find and produce oil.
An individual or company had to discover oil in commercial quantities before being able to secure title to the claim. Title was granted to the person striking oil first and anyone else drilling on the claim lost out. With hitches in the transition to a leasing system (the same system we have now, though it has had various modifications), some companies who were working to prove up on their claims lost out as other individuals or companies rushed to lease up the land from under them. Some people misinterpreted the new law, titles were clouded, and others took advantage of the moment. However, the new lease method prevailed and drilling was carried on in earnest.
W. D. "Bill" Newlon's Wyoming Reserve Oil Company hit oil at Gobbler's Nob in 1923 and Beneficial Oil Company soon proved the field, with such companies as Wyotah, Lincoln Idaho, Wyoming-Superior, Wolfe Petroleum, Senrab oil, Ogden-LaBarge Company, and Rainbow Oil joining in the action.
Also, the town of Tulsa was developed in the early 20s, probably with the anticipation that this Wyoming town would rival Tulsa, Okla. Lots in the townsite of LaBarge were also advertised at astronomical figures. The boom was on.
In 1926, the California Company purchased Beneficial Oil and the Newlon interests, including Wyoming Reserve, for a reported $2,750,000. Calpet construction boasted bunkhouses, a cookhouse where Chinese cooks up to 300 men a day, houses for staff, a recreation hall, a small refinery for high-gravity crude, an electric plant, machine shop, and, of course, oil derricks.
There was also a school, and June and Buzz Wassenberg fondly remember classmates at that school. Texas Company purchased Calpet in 1928 and subsequently purchased most of the other interests in the field, including those of Marvel Oil (Quealy Pfaff and others). Workers and their families were at the site until 1956 when the refinery closed.
The interests of Ogden-LaBarge were later bought out by Chevron.
A pipeline from LaBarge to Opal brought a major improvement in transporting oil to market. During 1928, workers suffered through a very severe winter digging the pipeline by hand under the direction of the Midwest Pipeline Company. The line began operation in January of 1929, ending the previous era of trucking crude by Mack Transportation. Heater stations were maintained and the line was patrolled daily.
The need to require producers on federal lands to operate fields as a single unit and produce oil in an orderly manner brought about the concept of unitization in 1931. The Interstate Compact to conserve oil and gas was ratified in 1935, ending an era of wasting oil under the "rule of capture," where each operator sucked oil out of the ground as fast as he could before the next guy could get it - the 10 straws in an ice cream soda concept.
The Wyoming Oil & Gas Conservation Commission was established in 1935 and well spacing was enforced. In 1948, the TipTop Unit was formed as the first federal unit here and the Hogsback Unit followed close behind.
The Budd No. 1 well, located on Charlie Budd's Corder place, blew in on Dec. 4, 1938, heralding the advent of the Big Piney Shallow Field. Water and gas blew out, forming tons of ice covering the rig, while workers struggled to control the blowout by forcing logs and other debris down the hole. Finally, the blowout was contained on Jan. 29, 1939. While another well was never drilled at that particular site, the event signaled the start of the search for natural gas that was to come in Sublette County.
Western Oil Refining's No. 2 well blew out at Tip Top Shallow field in 1952, putting 70 million cubic feet of gas into the atmosphere daily before being shut in 10 days later. Belco and Mobil purchased an interest in the field, and the Quealy/Pfaff interests of Western Oil Refining were sold to Enron, now EOG Resources, in 1994.
Belco Petroleum began leasing and the development drilling of the Big Piney Gas Field in 1953. Pacific Northwest Pipeline then negotiated to build a 1,466-mile pipeline to Bellingham, Wash., from Ignacio, Colo., and to purchase and transport gas from the Big Piney field. 1955-56 proved to be the most severe winter in 52 years, and workers fought drifts up to 20 feet deep as they struggled to lay 150 miles of pipe. The line, which would take the gas from the Big Piney field to the northwest market was completed in 1956, and the Big Piney Compressor Station began operation.
The major producers for the pipeline were then Belco, Texaco, and General Petroleum, and in 1957 a court-ordered divestiture precipitated the El Paso Natural Gas Company buyout of Northwest. Gas from this field was also made available to the towns of Big Piney and Marbleton by Mountain Fuel Supply.
Development in the deep Madison formation of the Overthrust Belt of the Wyoming Range was to come. In 1961, Mobil had penetrated the Madison's "sour gas" formation, which contains hydrogen sulfide, but the well was shut in. Then in 1969, Exxon drilled into the Madison but waited until 1981 to continue development. Meantime, in 1980 American Quasar had pierced the formation. However, only Exxon had the resources to proceed with building a processing plant at Shute Creek to separate the various components of the gas - methane, nitrogen, hydrogen sulfide (sulfur), carbon dioxide and helium - and market the commodities.
A dehydration site was constructed at Black Canyon and extensive well and pipeline development proceeded to deliver the gas from the Madison to Shute Creek, where the plant went online in 1986. At this time, gas and oil prices were low and activity in the oil patch had declined, so the departure of Exxon's construction crews from the southern part of Sublette County hit hard.
In the 90s, tight gas sand credits made drilling viable in areas which previously had been thought to lack enough permeability to make production profitable. The story of McMurry Oil Company's spectacular success with sand fracturing techniques which made this development possible, the entry of many companies into the gas exploration in the county, the exploitation of the Pinedale Anticline and projected coalbed methane drilling will be told in other articles.
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