Source: The Handbook of Texas Online
Panhandle field is a giant gas and oil
producing area that draws production from several
horizons of Pennsylvanian and Permian age granite wash
and dolomite, covering 200,000 surface acres in Hartley,
Potter, Moore, Hutchinson, Carson, Gray, Wheeler, and
Collingsworth counties of the Panhandle.
The field was classified as one reservoir by the Railroad
Commission of Texas until January 1, 1940, when
cumulative production totaled 346.8 million barrels of
oil. At that time oil production from the reservoir was
separated into fields named Panhandle Carson County,
Panhandle Gray County, Panhandle Hutchinson County, and
Panhandle Wheeler County.
The primary recovery of oil from the reservoir was driven
by solution gas and gas-cap expansion and reservoir
pressure has been maintained by gas and water injection.
Secondary recovery attempts in the oilfield were begun
with water flooding in 1946, but results were mixed. The
vast gas reservoir, known as Panhandle Hugoton field,
flanks the areas of oil production and is centered around
the city of Pampa in Gray County.
By 1994 the oilfields of the Panhandle district had
yielded a cumulative total of nearly 1.42 billion barrels
of oil and between 1973 and 1993 dry gas production was
8.1 trillion cubic feet.
Oil was first found in the Osborne area of Wheeler County
in 1910. Called Panhandle Osborne field, the area gave up
nearly 6 million barrels of oil before the Railroad
Commission consolidated it with Panhandle Wheeler field
on May 1, 1989.
However, it was in Potter County, three counties to the
west, that exploration resulted in the discovery of the
nation's largest natural gas reserve. In 1916 Amarillo
Oil Company, a locally funded venture, hired Charles N.
Gould to study the Amarillo fold for petroleum
exploration. Gould was a University of Oklahoma geology
professor who had first mapped the area for a water study
beginning in 1904.
The area that Gould and his associate, Robert S. Dewey,
studied and mapped for Amarillo Oil was located on either
side of the Canadian River on two large ranches in
northern Potter County, belonging to R. B. Masterson
north of the river and to Lee Bivins south of it. When
Gould and Dewey completed the study, they mapped a
prominent structure that was ten to fifteen miles in
diameter and exhibited 400 feet of uplift.
Gould and Dewey named the structure John Ray dome for the
nearby butte. Amarillo Oil was so impressed with the map
and the salient anticline that the company leased 64,000
acres and spudded the No. 1 Masterson on John Ray dome in
Masterson's high prairie, 225 miles from known
production.
The well was completed on December 9, 1918 to a total
depth of 2,269 feet where 10 million cubic feet of gas
were produced daily. In 1919 three additional wells were
completed in the Masterson high prairie, and all four
were tested on an open-flow gauge in March 1920, where
they yielded 160 million cubic feet of gas a day.
When other strong wells were brought in on locations
several miles apart in the ever-widening field, it was
obvious that the subsurface of the Panhandle held
enormous natural gas reserves. Engineers have estimated
that those reserves numbered 15 to 25 trillion cubic feet
of natural gas at discovery.
This major gas discovery in a then-isolated section of
the state captured the interest of major and independent
oil companies, although they questioned the economic
significance of even a giant field that had no market for
production and no transportation system. Oilmen doubted
that the reservoir would produce crude, the only form of
hydrocarbons they sought.
However, explorationists could neither deny nor ignore
the possibilities of the discovery and they began leasing
large blocks. On May 5, 1921 the Gulf Production Company
No. 2 S. B. Burnett in Carson County reached a total
depth of 3,052 feet and gave up 190 barrels of oil a day.
The well was shut in after pumping 1,000 barrels of oil
because there was no way to store it or move it to
refineries.
Although it was evident that oil could be produced in the
Panhandle district, oilmen noted that production before
mid-1923 in Carson and Hutchinson counties was by pump
and was limited to field use.
However, on June 1, 1923 the Sanford No. 1 J. C.
Whittington in southwestern Hutchinson County reached a
depth of 3,077 feet and found flowing oil of 38°
gravity, offering the encouragement oil explorationists
needed. During 1925 three surrounding counties were
opened to oil production and the first casinghead
gasoline plant in the field, owned by American Refining
Company, came on line.
In January 1925 a well in Wheeler County drilled to a
depth of 2,175 feet and began spraying oil. In March oil
production was established in Gray County and in May 1925
Potter County was opened to oil. By January 1926 a second
gasoline plant and a carbon-black plant were operating in
the field.
By June 1926 pipelines owned by Gulf Oil Corporation,
Humble Oil and Refining Company (later Exxon Company,
U.S.A), Magnolia Petroleum Company, and Bar-Tex, Marland,
Pan-Tex, Plains, and Sinclair companies offered outlets
for crude produced in the field. By late September 1926
Panhandle field reached a daily production average of
120,870 barrels of oil from 427 wells, and between 10,000
and 14,000 barrels of oil were shipped by railroad tank
cars from the field to refineries.
In February 1927 the Morton No. 1 Reeder in Moore County
came in with initial production of 225 barrels of oil
from a depth of 3,422 feet. Peak yearly production
occurred in 1927 when more than 40 million barrels of oil
were reported. By January 1930 voluntary proration was in
practice in the five-county oilfield and met moderate
success until statewide proration was installed by the
Railroad Commission on August 14, 1930.
Even though development of Panhandle field was directed
toward oil exploration after the first oil well was
completed, natural gas reserves proved prolific.
Beginning in 1925 gas pipelines were laid to move
production to distant markets. From 1925 to 1930 lines
were built by Northern Texas Utilities, Lone Star Gas,
South Plains Pipe Line, Cities Service Gas, Canadian
River Gas, and Consolidated Gas Utilities companies.
By 1929 the field supported forty-four gasoline plants
and fifteen carbon-black plants, but by 1931 the number
of plants increased to fifty-three gasoline and
twenty-four carbon black. By mid-1937 the number of
carbon-black plants climbed to thirty-one. The rapid
growth of these plants and the small number of gas
pipelines led to waste of natural gas and to the drainage
of gas from leases with no pipeline connection.
Although the state legislature enacted the Common
Purchaser Act in 1931 to give gas market equality, the
courts struck down the order of the Railroad Commission
to enforce the law. In 1933 the Sour Gas Law was passed
by the state legislature at the lobbying of gas-stripping
operators.
It allowed owners in Panhandle Hugoton field, where the
common pool consisted of as many as 300,000 acres, to use
25 percent of open-flow capacity for stripping the gas of
its natural gasoline and for blowing the residual gas
into the atmosphere when no reasonable market was
available.
Although pipeline companies wanted to buy the gas and the
public protested the health hazard, operators flared over
a billion cubic feet of gas each day in the field. It was
1935 before the law was repealed and upheld in the
courts, effectively ending stripping and flaring
procedures in Panhandle field.
Although gas flaring presented serious problems for
operators and the public in the Panhandle, the field
became known nationally as a helium reserve. Careful
analyses of gas in the vast reservoir revealed the
presence of helium in the Cliffside area in central
Potter County.
Since the only known helium for the nation existed in a
near-depleted field near Petrolia, Texas, and one at
Dexter, Kansas, the estimated reserve of 100 billion
cubic feet at Cliffside represented an important find.
The federal government acquired 50,000 acres on the
producing structure and an extraction plant was
constructed near Amarillo in April 1929.
By January 1, 1994 Panhandle field, the largest-volume
gas field in the United States, reported annual
production of 165,664,617,000 cubic feet of gas from
4,499 producing wells. The cumulative production from
1973 through 1993 was 8,108,125,146,000 cubic feet of
gas.
Annual oil production in the giant field was 5,023,878
barrels, and the combined cumulative yield from the
original field and its successors totaled 1,419,994,844
barrels. With its gigantic yields of both gas and oil
over three-fourths of the twentieth century, Panhandle
field represented one of the greatest petroleum reserves
ever found in Texas.
BIBLIOGRAPHY: William E. Galloway et al., Atlas of Major
Texas Oil Reservoirs (Austin: University of Texas Bureau
of Economic Geology, 1983). Charles N. Gould, Covered
Wagon Geologist (Norman: University of Oklahoma Press,
1959). David F. Prindle, Petroleum Politics and the Texas
Railroad Commission (Austin: University of Texas Press,
1981). Charles Albert Warner, Texas Oil and Gas Since
1543 (Houston: Gulf, 1939).
Julia Cauble Smith
(information from The Handbook of
Texas Online --
a multidisciplinary encyclopedia of Texas history,
geography, and culture.)