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Oil & Gas Historical Summary

(Modified from NBMG Bulletin 104)

Developments through 1986
The first well drilled for oil in Nevada was an 1,890-foot-deep dry hole drilled in Washoe
County just southwest of Reno in 1907. Few wells were drilled in the State from 1907 to
the early 1950s; these dry holes are all poorly known because no permits or other records
were required until 1953.

In 1954, Shell Oil Co. drilled and completed the Eagle Springs No. 1-35 well in Railroad Valley,
Nye County; this well became the first commercial oil producer in Nevada. The Eagle Springs
Field included 14 wells with average production of nearly 20,000 barrels of oil per well per year
by 1968. In 1985, ten wells still produced in the field; two wells made 18,000 barrels of oil and
the rest averaged 2,800 barrels for the year. Most Eagle Springs Field wells were shut-in (not
produced) for most of 1986 because of low crude oil prices. Initial estimates of recoverable
reserves for the field were 4 million barrels of oil; by the end of 1986, 3.8 million barrels had
been produced.

The second discovery that resulted in commercial oil production in Nevada came in 1976, when Northwest Exploration Co. drilled and completed the Trap Spring No. I well in Railroad Valley, 5 miles west of the Eagle Springs Field. One hundred and forty-five dry holes had been drilled in Nevada after the Eagle Springs discovery and before the Trap Spring discovery. By 1980 there were 15 wells in the Trap Spring Field, with an average production of 76,700 barrels of oil per well per year. In 1985 there were 27 wells in the field, with an average production for the year of 18,600 barrels of oil per well. Recoverable reserves were initially estimated to be 10 million barrels of oil; by the end of 1986, 6.8 million barrels had been produced.

Nevada's third discovery well, the Northwest Exploration Co. Currant No. 1, was drilled in 1978, also in Railroad Valley, 6 miles north of the Eagle Springs Field. This well produced only 646 barrels of oil before it was plugged and abandoned in 1986 (This well was producing a couple of hundred barrels of oil per year in the late 1990s). No other wells were drilled in the Currant Field.

Northwest Exploration Co. Bacon Flat No. 1, drilled in 1981, was Nevada's fourth discovery well. The Bacon Flat Field is also in Railroad Valley, 9 miles south of the Eagle Springs Field. The field consists of only the discovery well, but this well had produced 210,000 barrels of oil and was still flowing an average of 200 barrels of oil per day by the end of 1986. Reserve estimates are unavailable.

The only oil production outside of Railroad Valley was discovered in 1982 by Amoco Production Co. The Amoco Blackburn No. 3 was drilled and completed in Pine Valley, Eureka County, about 120 miles north of the nearest production in Railroad Valley. By the end of 1986, the Blackburn Field included four wells and had produced nearly a million barrels of oil; the two best wells were still averaging 300 to 450 barrels of oil per day. Reserve estimates are unavailable. (367 barrels of oil were produced from the Deadman Creek Field in Elko County in 1997-1998 before it was shut-in).

The discovery of Nevada oil outside of Railroad Valley renewed the interest of many exploration companies. By the late 1970s, oil and gas leasing in Railroad Valley was essentially closed, that is, nearly all leases were taken, making it difficult or expensive for new companies to explore in the valley. Nearly two-thirds of all wells drilled by 1982 had been drilled in Railroad Valley. In other valleys, there had been little drilling and leases were still available and cheap. Since the Blackburn Field discovery, exploration has expanded throughout Nevada, and by the end of 1986, less than half of all wells ever drilled in Nevada were in Railroad Valley.

The most prolific oil field in Nevada was discovered in 1983, when Northwest Exploration Grant Canyon No. 1 was drilled and completed. The Grant Canyon Field is in Railroad Valley, less than a mile east of the Bacon Flat Field. The discovery well watered out and was shut in by early 1986; at year-end the remaining two field wells continued to produce at average rates of 2,200 and 4,1 00 barrels of oil per day. For a time, Grant Canyon No. 3 was the most prolific onshore oil well in the continental United States, flowing up to 4,300 barrels of oil per day. Recoverable reserve estimates are 13 million barrels of oil; 5.3 million barrels had been produced by the end of 1986.

The most recent oil discovery in Nevada was drilled in 1986: the Marathon Oil Co. Kate Spring No. 1, in Railroad Valley less than a mile south of the Eagle Springs Field. This discovery well had an initial flowing potential of 345 barrels of oil and 1,371 barrels of water per day. The well produced 1,500 barrels of oil before it was shut in because of engineering problems and low prices for crude oil.

Drilling activity in 1986 was limited because of unstable and low oil prices, but operators continue permit to wells in Nevada. Future increases in drilling activity will be related to increased prices for crude oil. Federal oil and gas leasing policies, favorable State oil and gas regulations, and recently published articles in petroleum industry journals should all continue to encourage petroleum exploration and production activity in Nevada. (A good summary of the oil fields of Nevada is the Nevada Petroleum Society's 1994 publication NPS1, Oil Fields of the Great Basin.

Developments Since 1986
The activity of the oil and gas industry in Nevada has been summarized in the NBMG annual report The Nevada Mineral Industry since 1979. These are available through the NBMG Publication Sales Office and the 1994 through 1999 issues are free on the NBMG website. Nevada's oil production peaked at about 4,000,000 barrels in 1990 and slipped to about 700,000 barrels in 1999. Between 1953-1999, Nevada has produced over 46,000,000 barrels of oil of which over 20,000,000 barrels has been produced from the Grant Canyon Field and almost 13,000,000 barrels has been produced from the Trap Springs Field

Nevada continues to be considered a frontier state for oil exploration with 15 small oil fields in three areas of the state (Pine Valley in northern Eureka County, Railroad Valley in northeastern Nye County, and Deadman Creek in Elko County). Since 1907, about 750 wells have been drilled. This includes about 270 wells drilled since 1986 of which about 50 were producers. As of 1999, 99 wells were listed as producers of which 26 had been shut in for one year or more.