Chapter II.

Well Spacing
A Theory of Well Spacing*
By W. P.

HASEMAN,

OKLAHOMA CITY, OKLA.

(Tulsa Meeting, October, 1929)

THE well method of producing oil and gas is universally used in

the development and operation of oil and gas properties. It consists
essentially in the spacing of a number of wells on a given tract, and in
drilling and operating them in accordance with established practices.
The method is based on a fundamental energy principle. This principle
governs the state and the change of state of fluids or fluid mixtures confined under pressure within a porous and permeable reservoir in such
a way as to direct a flow from the reservoir into and out of a drilled well
with a reduction of potential energy.
The application of the well method of producing oil has given data
which prove that the total yield of oil from a reservoir through wells is,
in general, only a small fractional part of the total oil that is contained
in the reservoir. It is generally recognized that a spacing of one well
to each 160-acre tract of any good oil pool is too wide. However, one
well to this 160-acre tract will yield a large quantity of oil and in time will
dissipate most, if not all, of the potential energy that was originally stored
and retained in the fluids by pressure. Two wells spaced and drilled on
this 160-acre tract would yield approximately twice the quantity of oil,
while four wells would yield approximately four times the oil.
A well spacing is soon reached, with the addition of wells to this 160acre tract, in which the drainage interference of offset wells will materially
affect the yield of oil per well. The increased yield of oil, therefore, is
not directly pr<?portional to the added number of wells but the increased
costs of development are directly proportional to the added number of
wells. It is evident that while an added number of wells to this 160acre tract yields an increased quantity of oil, there is an economic limit
to the number of wells to be added. The yield of oil and the costs of
development and operation are of such a nature, and are so related, that

* For discussion by the author of his equation and its application, see his articles
including charts and tables, in Natl. Petro News (1929) 21, No. 19, 59, and No. 23,63.
t Consulting Engineer.
146

w.

P. HASEMAN

147

the net profit to be yielded from this 160-acre tract will increase to a
maximum at some critical number of wells. l
A spacing of wells on a given tract which efficiently utilizes the natural
potential energy in the fluids in the yield of oil is generally too wide
for the efficient utilization of the artificial energy of repressuring. Added
wells are essential, therefore, in most repressuring operations. These
added wells, however, should be drilled in the early development of the
tract and operated so as to secure added efficiency in the utilization of the
natural potential energy in the fluids. The early addition of these wells
up to a certain limit is more effective in securing an increased economical
yield of oil than is the repressuring operation.
The spacing of wells is truly a scientific problem. It has been formulated and a solution has been reported in a recent paper. 2 The principles which control well spacing and which are essential to a formulation
of the problem will be outlined and briefly discussed.
The yield of oil from a well is known to be affected by many and varied
factors. 3 This fact precludes the development of a practical well-spacing
formula which includes as many constants as there are factors. It is
possible and of interest to classify and list these factors in groups and to
analyze and formulate the well-spacing problem in terms of group factors.
As a basis for this discussion the factors will be listed in two groups:
Group i.-Fixed factors.
Group 2.-Variable factors.
Most of the fixed group factors define the conditions or characteristics
of the reservoir stratum and the confined fluids which affect the yield
of oil. The fixed group factors affect the potential oil of a pool that can
be yielded by wells and determine whether or not an oil pool will be
commercially profitable for any spacing of wells whatsoever. Among
thesEl factors are porosity, sand texture, cementation, specific gravity
of oil, viscosity of oil, natural gas-oil ratio, thickness of pay stratum,
saturation of pay stratum, etc. They affect the yield of the oil from a
well in a more or less uniform manner for the various spacings of wells.
The magnitudes and trends, if any, of their influences on the yield
of oil are considered to be fixed and not materially altered, at least, by
any spacing of wells such as would be used in the commercial operation
of a given tract in an oil pool. The variable group factors are largely
controllable factors and can be fixed at will. Among these factors are the
spacing of wells, the timing of completion of offset wells, the depth of
1 W. P. Haseman: Profits and Proper Spacing of Wells.
Oil & Gas Jnl. (Oct. 18,
1928) 27, No. 22, 53.
2 W. P. Haseman: A Formula Method for Well Spacing and Rate of Production.
Natl. Petro News (1929) 21, No. 19, 59.
3 Idem.

148

A THEORY OF WELL SPACING

penetration of the pay stratum, the method of control of producing

wells, etc.
It follows then, in case the operations are carried out on a given tract
under such conditions that the spacing of wells is the only variable factor,
that the yield of oil from a well or the tract can be expressed in a formula
with one constant. 4 This constant is termed the spacing constant and
its value is to be determined by field data.
DERIVATION OF FORMULA

The production of oil by the well method is a phenomenon that is

controlled by fundamental principles. These principles govern many
natural phenomena such as monomolecular and radioactive changes.
In picturing this phenonenon of producing oil, each producing unit,
which consists of one well, the reservoir stratum and the confined fluids
within the drainage distance of the well, is assumed to contain a definite
and measurable quantity of oil. This quantity of oil is considered to be
composed of two portions, the one portion termed active and the
other inactive.
The active oil is energized by the gas and vapors associated and
retained with it under pressure. It represents the potential quantity of
oil that can be yielded by drilled wells. The number and spacing of the
wells to a given tract determine, largely if not wholly, the efficiency of the
yield of this potential oil. The inactive oil represents the quantity of oil
that is held on the material grains of which the reservoir stratum is
composed, and is otherwise held by films and allied molecular phenomena.
The inactive oil must be treated or acted upon by some agent such as
heat, chemicals, etc., before it is transformed into active oil and yielded
commercially by wells. N ow let
Po
represent the total quantity of active oil under a given tract,
P"
represent the quantity of active oil that is yielded by n wells
spaced to the given tract,
Po - P n represent the quantity of active oil remaining in the reservoir
and which could have been yielded by added wells spaced to
the given tract.
In accord with the principles that control these changes, an added well
to the tract would have yielded an added quantity. of oil proportional
to the quantity of active oil remaining in the reservoir under the tract.
Therefore
dP,.

dn

= X(P o - P"

Integrating and substituting limits,

P" = Po(l - e-"n)
Idem.

DISCUSSION

149

This is a spacing formula which can be applied directly to the spacing

of wells on tracts in an oil pool provided the operating conditions in the
pool conform to the assumed conditions in the formula. When the operating conditions deviate from the assumed conditions, it is necessary to
evaluate the disturbing conditions by special knowledge and formulas and
to introduce an engineering safety factor into the result of the
spacing formula.
This formula is most useful in the science of oil production. It gives
new and needed data that check most favorably with available field
data. In addition, it is the fundamental basis upon which there has been
developed a practical method for the study and determination of the
program of development and operation of an oil property that would give
a greater yielding efficiency of oil and profit. The method is equally
applicable to proved but undeveloped properties and to depleted but
repressuring properties.

DISCUSSION
S. C. HEROLD, * Los Angeles, Calif. (written discussion).-If each of us was asked
to develop a formula pertaining to the spacing of wells in accordance with known and
most probable factors affecting production in any given field it is likely that no two
such formulas would be identical. Probably most, if not all, of them would be
adequate, but certainly some would be simpler than others, and therefore more convenient. Dr. lIaseman gives one which I am inclined to accept as adequate and
convenient because of its exponential form. If any difficulty is to be encountered
in the use of his formula it will be on account of uncertainties respecting the values of
quantities to be substituted.
I do not go as far as Dr. Haseman in supposing his equation to have a fundamental
scientific basis in well or reservoir performance. It is rather, I believe, merely an
approximation formula, an empirical formula, or a rule of thumb formula, the value
of which depends solely upon its efficacy in giving a solution reasonably accurate as
shown by later history in producing "from the field. A formula of exponential form
can be entirely adequate from a practical point of view while it is at the same time an
absurdity purely from the theoretical point of view. In order that we may obtain an
idea of the practical utility of his equation, Dr. Haseman has given us his Table 2.5
No better agreement between actual and computed values should be desired.
The spacing constant, designated by the Greek letter lambda, so necessary in the
use of this formula, is not fully explained. Seemingly it is the quantity wherein
factors of Groups 1 and 2 enter. After reading Dr. Haseman's present paper, and its
equivalent in the National Petroleum News of May 8, 1929, I feel that before pressing
too strongly for information concerning it, one should carefully ascertaiD from Dr.
Haseman an answer to the question, "Is the evaluation of lambda performed by a
process or by a formula retained in secrecy?"
We are told that when operating conditions deviate from assumed conditions, it
is necessary to evaluate the disturbing conditions, but if this is to be done by means of
special knowledge, I am naturally curious about that special knowledge. Perhaps
Dr. Haseman will favor us with a statement concerning its nature.

* Petroleum Geologist.
s Idem., 63.

150

A THEORY OF WELL SPACING

Dr. Haseman's formula, we learn, is equally applicable to proved but undeveloped

properties. In this case, how may one evaluate the quantity Po, representing the
total quantity of active oil under a given tract?
The formula is said to be equally applicable to depleted but repressuring properties.
I would ordinarily expect otherwise, in view of the fact that repressuring operations
are usually equivalent to a forced drive. Where motion is confi,red to a circular area
with natural flow, airlift and pump, it becomes elliptical in forced drive. This would
throw the equation off considerably. Nevertheless, I would accept data in the nature
of Table 2 as authority if and when such are available.
It is no difficult task to call attention to disadvantages displayed by any suggested
formula. There is one outstanding advantage in the present one which we should not
overlook; namely, that its use does not necessitate our understanding the intricate
theoretical mechanics of reservoir performance. We need not concern ourselves with
the capillary resistance due to alternating globules of oil and bubbles of gas in the
interstices of the porous formation, nor worry in the least about the effects of backpressures against production. These features are automatically cared for in a formula
of this nature.
H. D. WILDE, JR., * Houston, Texas.-I prepared a written discussion, but Dr.
Herold's comment agrees so well with mine, point by point, that presentation of
mine does not seem necessary.
MEMBER.-Is the evaluation of 50 per cent. the limit of recovery?
W. P. HAsEMAN.-No, not necessarily so. Knowledge gained by extensive laboratory experiments and field operations at Pechelbronn give a maximum ultimate
recovery around 50 per cent. An infinite number of wells drilled to a finite area is
equivalent to a mining method of producing oil with very closely spaced tunnels.
The value of Po depends upon the sand and fluid conditions and may be as small
as, say 10 per cent. and theoretically as large as 100 per cent. The shape of the curve
and the values of p .. within the economic limits of n for a commercial pool is altered
little by a change of Po from 50 to 30 per cent. or to 80 per cent in the formula.
For the special case where Po equals 50 per cent. and one well is drilled to each 10
acres with a yield of 15 per cent., substitute 15 for P .. , 50 for Po and 1 for n in the formula. The spacing constant A is the only unknown term in the equation, 15 =
50(1 - e->'). The numerical value of A is the reciprocal of the number of wells to be
drilled to each 10 acres to yield around 63 per cent. of the maximum possible yield of
oil through drilled wells.
MEMBER.-May I ask why you hit on 63 per cent.?
W. P. HAsEMAN.-For the case where A equals lin the equation becomes p .. =
e- 1) = Po(l - 0.3678) = Po(0.63). Therefore where A = 1 In the yield is
P" = 0.63P a
P(1 -

MEMBER.-If you had three months production history on a well in that pool could
you get the formula by production and not by curves?
W. P. HAsEMAN.-I infer that you desire to know what spacing of the wells would
be best in the pool. The formula is applicable to commercial pools only. In case
the pool of which you speak is to be a commercial pool one can compute with considerable security the increased profits of one spacing over that of another spacing.

* Director of Production Research, Development Department, Humble Oil &

"1.efining Co.

DISCUSSION

151

The computation can in general be made on the first three months production of the
discovery well.
MEMBER.-How much could you improve on that if you had production data?
W. P. HAsEMAN.-Additional production data, particularly production data of
individual wells, are most valuable in more definitely defining the maximum net
profit on the curve. Since in many commercial pools with a spacing of one well to
each 10 acres the wells yield around 60 per cent. of their ultimate production within
the first four months the flush' production data are important.
MEMBER.-You say that where operating conditions deviate from assumed conditions it is necessary to evaluate the disturbing conditions by means of special knowledge. Could you tell us about that special knowledge?
W. P. HAsEMAN.-In the practical application of the formula such disturbing
conditions as delayed completion of offset wells must be evaluated. This necessarily
rests upon knowledge secured by some theory of decline of well production. The
evaluation of such disturbing conditions can be made within economic security from
present known data. Added data are much needed to more definitely define the
limits of the constants in the formula. The details of this determination are too
lengthy to be given here.
MEMBER.-Dr. Herold's third question is: "Dr. Haseman's formula is, we learn,
equally applicable to proved but undeveloped properties. In this case how may one
evaluate the quantity Po, representing the quantity of active oil under a given tract?
W. P. HAsEMAN.-The quantity Po cannot be evaluated with numerical precision.
In the practical application of the formula, since the expense of drilling one well is
large, a considerable variation in the observed data may exist without seriously affecting the economics of the formula. The method of evaluating Po rests upon a theory
of decline of well production.
In applying the formula to a practical case the acre and not the well is the basis
upon which net profit is to be computed.

J. B. UMPLEBY, * Oklahoma City, Okla.-If you had the cost, and development
cost is a big item, what effect would the yield of the wells have on the lifting cost?
A 25 per cent. difference will make a big difference in the net profit. Are you figuring on the net profit?
W. P. HAsEMAN.-I am figuring on the net profit per acre. The lifting cost has
been considered in the net price per barrel of oil. The effect of this on the net profit
per acre can be seen in the case of the curves of chart 3. The maximum net profit per
acre shifts toward a wider spacing of wells with increased lifting costs, other factors
remaining c6nstant.
MEMBER.-You should consider the percentage per barrel of net production if
you are to have less cost per acre.
W. P. HAsEMAN.-The net profit is figured on the basis of the acre and not on the
well. The well cost is considered as an added investment in equipping the acre to
yield oil. The oil is contained beneath the acre and not in the well. Whenever a
given tract is proved with reasonable security to be commercially productive of oil
there exists a considerable investment per acre in the tract and the maximum profit per
acre of the tract can be secured by the added investment in the wells properly spaced.

* Geologist

and Petroleum Engineer.

152

A THEORY OF WELL SPACING

J. R. SUMAN, * Houston, Texas.-This problem of well spacing is a most important

problem to the petroleum engineer today and the problem we seem to know the least
about. When we do learn something about it, we will be in position to develop a unit
operated property.
In the development of a unit proposition, we have something to depend on in the
place of well spacing. We should give attention to the maintenance of pressure until
we learn something more about well spacing. Until then we cannot tell whether we
are developing economically . We could well go to repressuring and forget well
spacing. It seems to me to be ridiculous to drill the number of wells mentioned in
the formula of Dr. Haseman for securing the maximum profit.
I would like to say a few words in behalf of the oil executives. Mr. McGraw of
the Gypsy company has said that in the Seminole, if only one well had been drilled to
each 20 acres, the profits would have been much higher. I do not know how Dr.
Haseman arrived at the value of lambda, but Mr. McGraw arrived at this opinion by
experience, and the spending of some $50,000,000 in this area, and I think the opinion
of a man of experience is well worth consideration on one side at the same time you
are considering a theortical proposition on the other side.
As I understand the formula, it applies principally to a structure where there is
no water drive and no gas. I should imagine that 90 per cent. of the fields in the
United States have the water drive and free gas, and therefore there must be a factor
in well spacing to take these items into consideration. We have a number of structures where water drive is so high that we feel there should be 80 or 90 per cent.
recovery. This also must be considered in arriving at the formula.
Too much weight can be given to such a table. In the hands of an unscrupulous
engineer or royalty owner this table would cause any amount of litigation in this
area. The royalty owner is concerned only with the number of barrels of oil produced
per acre, and every operator has an obligation to the royalty owner to get the maximum
economic recovery, and another obligation at law to get the maximum barrels per acre,
and until you have more data and more knowledge of how these formulas are arrived
at, it would be well not to give them too much prominence.
M. G. CHENEY, t Coleman, Texas.-Do I understand, Dr. Haseman, that your
calculations were based on the old Bartlesville field?
W. P. HASEMAN.-The only data that I have to support my formula are from
publications of the U. S. Bureau of Mines.
M. G. CHENEy.-The old Bartlesville fields which furnished these data were
mostly produced with unrestricted open flow and wastage of gas under usual conditions
of competitive drilling. No doubt individual wells widely spaced and favorably
located in respect to oil, gas and water occurrence, with flow restricted by tapered
tubing or otherwise to give a low oil-gas ratio would give entirely different results
from average wells produ.ced under the wasteful conditions which are the basis of
Dr. Haseman's calculations. For example, I know one well in the Strawn sand, that
6 years ago came in for 600 bbl. This well was" pinched in" during its early life, has
continued to flow and is still producing about one-third of its initial production with a
total production to date of nearly 1,000,000 bbl. of oil, an amount to be expected from
10 to 20 wells under usual spacing. I wonder if the well-spacing data derived from
antiquated methods of producing oil can be considered applicable to pools developed
und~r the better methods of well management.

* Director and Executive, Production Department, Humble Oil and Refining Co.
t President, ~nzac Oil Corpn.

153

DISCUSSION

W. P. HAsEMAN.-The formula will hold for any given method of development

and operation. The existing field data should in general support the calculations
recorded in Table 1 (Natl. Petro News). The formula is equally applicable to pools
where the expelling energy is directly associated with either the liquid or gas or
both in the producing strata.
M. G. CHENEy.-The well referred to above produced as much alone as could be
expected from 100 acres or more of Strawn sand, hence why drill 10 or 20 wells?

W. P. HAsEMAN.-That is an exceptional case.

M. G. CHENEy.-It is an exceptional case in well management. There have been

other cases where single wells producing without interference have yielded exceedingly
large volumes of oil. Should we not
investigate the possibilities of this
profitable method of wide spacing and
proper conservation of gas? Unit oper

ation brings opportunity for testing such

methods; i. e., spacing wells far apart,
N
shutting in wells with excess gas, main

taining high pressures by repressuring

and so forth.
W. P. HAsEMAN.-The spacing of
wells is a problem of commercial pools
only. A one-well pool is the exception
and has no spacing problem.

R. D. COPLEY, * Los Angeles, Calif.-

I
I
I

Well spacing is one of the serious prob

lems of the Los Angeles Basin. This is
I
not due to the fact that we do not

i
understand the fundamentals of economic spacing, but because all of the
recent fields have had their "town-lot
areas" or portions which have been
FIG. 1.
previously subdivided for residential
purposes. This permits the entree of many unscrupulous operators. One or more
wells are drilled on lots of 50 by 150 ft. Naturally a large portion of the wells spaced
so closely cannot hope to payout, as the cost of drilling varies from about $60,000, in
Torrance, to $175,000 in Santa Fe Springs. Under such conditions there is no incentive for operators to give adequate protection to sands other than those they expect
to produce. Their only object is to reach the pay first and get the oil before their
neighbors do.
There are many examples of the evils of town-lot drilling. Anyone interested
need only investigate the Lomita Area in the Torrance field, the town-lot areas in
both the new and the old field at Huntington Beach, Alamitos Heights of the Seal
Beach field, Los Cerritos area of Long Beach, or Hell's Half Acre at Santa Fe Springs,
and compare these with the more orderly developed fields of Dominguez Hills, Inglewood or the easterly dome of Seal Beach field.

R. M. CARR, t Tulsa, Okla.-We have had occasion to observe a particular lease

in the Seminole area. Some of the figures on it are very interesting. Let Fig. 1

* Production Department, Southern District, Standard Oil Co. of California.

t Petroleum Engineer, Sinclair Oil & Gas Co.

154

A THEORY OF WELL SPACING

represent an 80-acre lease lying east and west. Due to a peculiar subdivision of
royalty interests it was necessary to drill six wells on what would be equivalent to the
west 40 acres, while the east 40 acres were drilled with the normal lO-acre spacing. I
want to draw a few comparisons between the recovery per acre of the six-well 40-acre
piece, the four-well 40-acre and also the offset 160-acre lease to the north.
The 160-acre lease was drilled with a normal lO-acre spacing except along the
south line, where the owners naturally offset with five wells. Thus the lease has
17 wells.
The recovery per acre as of Aug. 1, 1929 on the six-weIl40-acre was 57,500 bbl., on
the 17-well160-acre it was 45,750 bbl., while on the four-weIl40-acre it was 41,000 hbl.
even. The recovery per acre on the four-well 40 acres is very much in line with ot.her
offset leases drilled with 10-acre spacing. Probably a part of the higher per acre
yield on the 17-well160-acre piece is due to the additional well, although it may admit
of some argument.
For comparison, without using lambda or anything but ordinary eighth grade
arithmetic, I will attempt to prove that the 6%-aere spacing has been an advantage
by producing more oil. Let us assume that the six-well 40-acre had been drilled with
only four wells and that it was as productive as the 160 acres to the north, thus we
could expect to produce only 45,750 bbl. per acre. The difference between the actual
yield of 57,500 bbl. and the expected yield of 45,750 bbl. is 11,750 bbl. per acre.
Multiplying by 40, we have a total difference of 470,00 bbl. If this additional 470,000
bbl. of oil has been recovered by reason of the two extra wells, let us carry the demonstration a little further and see what the additional recovery has amounted to in dollars.
Deducting a one-eighth royalty of 58,750 bbl., we leave the producing company a net
production of 411,250 bbl. from the two extra wells. The cost of the two wells was
approximately $150,000. At $1 per harrel, net, for the oil, we have $411,250 minus
$150,000 or $261,250 additional net return from the two wells.
Now, the six-well 40 acres could be compared to the four-well 40 with a greater
difference in the figures. The west 27 acres of this 80-acre lease had four wells on it
and the recovery of this 27 acres has been practically 70,000 bbl. per acre, notwithstanding the fact that one of the wells was greatly delayed in drilling. A comparison
of these four wells with an average 40 acres of four wells having a recovery around
35,000 to 40,000 bbl. per acre is hardly justified, since it is too much like comparing
individual wells.
I have not been advocating wider spacing and would take exception to the statement that one well to 20 acres will make more profit. One well to every 8 acres would
have been an ideal spacing for the Seminole district. The best lease I know of in the
Seminole field has a recovery of approximately 50,000 bbl. per acre, which is slightly
higher than the per acres yield of this entire 80 acres we have been considering, but
since the two leases are widely separated I doubt if a comparison should be made.
W. P. HAsEMAN.-There is no doubt in my mind but that a closer spacing of wells
in most of the commercial oil pools in this country would have yielded a greater
profit per acre. There will be a quicker return of the well investment with closer
spacing. For example, in the instance of the yield of 342,000 bbl. per well from the
Bowlegs lease with the 10-acre spacing, there will be around 205,000 bbl. received
within the first 100 days. With a spacing of 2% acres per well there will be a yield
of 184,000 bbl. per well with around 110,000 bbl. received within 110 days.
M. G. CHENEY.-There must be other . factors than well spacing involved
to explain difference in yields. There is an extra 4500 bbl. per acre or a total
of 720,000 bbl. on the 160-acre tract compared to the 40 acres southeast of it. The
one extra well on the 160 acres can hardly account for the extra 720,000 bbl., hence

DISCUSSION

155

we must be dealing with some factors other than well spacing. As to extra yield due
to six wells on the 40 acres, this case might be held to prove merely that if one operator
completes six outlets to a high-pressure oil reservoir while practically all his neighbors
complete only four, for his additional 50 per cent. drilling he will recover an additional
23 to 30 per cent. per acre. This seems to offer scant evidence that had this pool
been drilled up with six wells to each 40 acres average yields would have been appreciably greater than under the customary plan of four wells per 40 acres.

R. M. CARR.-I believe I said something about the 17 wells on the 160 acres,
leaving an opportunity for discussion. Even if it is not logical to attribute the additional production to the extra well, I would have chosen that 160-acre lease, because
it shows the highest yield per acre outside this exceptional 40 acres I was demonstrating. I could have taken some other lease with a lower yield per acre and shown a
greater proportionate net recovery from closer spacing.
M. G. CHENEY.-If all surrounding 40's had the wells drilled at the same time and
spacing, how much would have been gained per acre?

R. M. CARR.-They would undoubtedly have obtained more oil due to closer

spacing. Practically a year clapsed before the sixth well was completed. Only four
wells were producing during the flush stage, for the fifth well was delayed for some
time. The sixth well has recovered only 94,000 bbl., yet this particular 40 acres is
far above the average in total recovery.
'. W. V. VIETTI, * Big Spring, Texas.-I have made a few calculations on the basis of
Dr. Haseman's paper with particular reference to the figures he presents on the
Bowlegs pool showing increased recovery and the increased returns expected per acre.
These figures were analyzed from the point of view of making eaeh additional well
(drilled over the one well to 10 acre-tract) pay for itself.
Let us first consider the figures for 50 c. net oil-that is, the operator makes a gross
of 50 c. on each barrel after deducting lifting costs, royalty, etc. One well to 10 acres
will produce 342,000 bbl., or a return of $171,000 on a $100,000 well. This is, then,
a profit of 71 per cent. Drilling two wells to the 10 acres or one well to 5 acres will
increase the investment by $100,000; will increase the recovery by 205,200 bbl., and
the gross return will be increased by $102,600. This, then, is a profit of $2,600 on the
additional $100,000 invested, or a return of 2.6 per cent. Drilling one well to each
2Yz acres will result, similarly, in a loss of $153,800 on the additional $300,000 invested
for three additional wells on the 10 acres.
A different set of returns is obtained if the return will be $1 net for each barrel of
oil. In this case, one well to 10 acres will produce a profit of $342,000; two wells to
10 acres will yield a profit of $105,200 on the additional well; but the 2Yz acre spacing,
or four wells to the 10 acres, will cause a loss of $7600 per additional well drilled.
We have worked out several well-spacing problems to determine proper spacing
in new fields but always with the attitude of making a fair return on the additional
investment necessary to space the wells closer than the one well to 10 acres.

* Petroleum Engineer,

Continental Oil Co.