Petroleum Exploration and Production in Nevada

Winter 1988

Nevada is not usually thought of as an oil-producing state but exploration for oil, which began 80 years ago, has been successful to a degree during the past 35 years, and oil fields in two valleys in interior Nevada are presently producing oil.

The first well drilled in search of oil in Nevada was a 1,890-foot deep "dry hole" drilled in 1907 on a terrace overlooking the Truckee River a few miles west of downtown Reno. Another well is rumored to have been drilled on Peavine Mountain northwest of town. Rumors of oil discoveries and plans for oil development abounded in the early 1900s in Reno and several other Nevada towns. The newspapers commonly had articles on the purported favorability of certain regions for oil. Nevada's early twentieth century oil promotional activity coincided with the development of the internal combustion engine and a phenomenal growth in the U.S. petroleum industry. Unfortunately, it took nearly half a century and 85 dry holes before the state's complicated geology yielded a producing oil well.

In addition to the early exploration efforts in the Reno area, a well was drilled in the same year by the Western Pacific Railroad Co.along the tracks near the siding of Sulphur in northwestern Nevada's Black Rock Desert. Otherwise, there was little reported oil drilling until the 1920s, when unsuccessful wells were drilled in several areas.

From 1919 to 1923 there was a great deal of excitement about the oil and gas possibilities in the vicinity of Fallon. Small amounts of methane or swamp gas had been recognized in shallow water wells since the 1850s, and interest in this and other promotion of the area resulted in the formation of a number of companies. Over a dozen wells were drilled from depths of a few hundred to 3,200 feet. Interest waned when no discoveries were made, although modern exploration drilling was also conducted unsuccessfully in the 1960s and 1970s.

The Bull Run Oil and Gas Co. drilled a well in 1922 about 60 miles north of Elko, and another well was drilled near the town in 1924 by the Elko Oil Development and Improvement Co. In southern Nevada,the first oil exploration well known to have been drilled in Clark County was completed in 1929 near Arden, 15 miles southwest of Las Vegas.

The search for oil in Nevada ceased during the 1930s' depression, and little serious consideration was given to the possibility of commercial quantities being found.

The modern era of petroleum exploration began in Nevada in 1950,and shortly thereafter, in 1954, Shell Oil Co. hit oil near Currant 50 miles southwest of Ely. The resulting oil field at Eagle Springs in Railroad Valley has produced 3.8 million barrels of oil in the past 32 years. Although this discovery encouraged drillers and speculators to drill there and elsewhere in Nevada, the next field was not found for 22 years, during which time about 100 dry holes were drilled. The Trap Spring field has produced over 7 million barrels of oil since its discovery in 1976. The pace of discovery and production has accelerated considerably during the past 10 years. Two more small oil fields were discovered in Railroad Valley in 1979 and 1981, and the first Nevada discovery outside of Railroad Valley was made in 1982. The Blackburn field, 30 miles south of Carlin, has produced 1.3 million barrels of oil so far.

The discovery of the Grant Canyon field in Railroad Valley in 1983 has tripled Nevada's oil production. The Grant Canyon No. 3 well may be the most productive onshore flowing well in the contiguous 48 states, averaging over 2,000 barrels of oil per day since being put in production in 1984. Daily production in 1987 varied from 3,000 to more than 4,000 barrels.

Three new oil fields have been brought into production in the past 3 years but their production through 1987 was not great enough to show on the graph below. One of these was discovered in Railroad Valley in 1986. The other two were discovered in 1987 and 1988 in Pine Valley a few miles north of the Blackburn field.

---Larry Garside, Research Geologist