419 



The Santa Barbara Channel has been, for the most part, a disappointment 

 to the industry. Up until the time of the recent disaster offshore Santa Barbara, 

 only three announced discoveries had been made with a possibility of two additicn- 

 al , One was by Union Oil and its three partners. Gulf, Mobil and Texaco, each 

 •with a 25% interest in Block 402. The second by the Sun Oil Group (Sun Oil, Marathon, 

 Superior Oil and Sunray DX Oil, which was recently merged into Sun) in adjoining 

 Block 401, and the third by Humble Oil (Standard Oil of N. J. ) in Block 342. In add- 

 ition to these three announced discoveries, there is a possibility of two additional 

 ones although no firm announcement has been made so far. Also, three active tests 

 were being drilled when the Federal Government announced a suspension of drilling 

 because of the oil spill in the Channel. But more innportantly, there have been 31 

 dry holes or abandoned wells drilled so far in the Channel. 



Most of the drilling results on acreage leased in the offshore Texas sale 

 have been kept secret due to a substantial amount of acreage which is still unleased 

 in the nearby vicinity. There have been two known discoveries and a possibility of 

 about five additional ones. Firm discoveries have been announced by Texaco, the 

 highest bidder in the Texas sale, and by the Alamos Group, a six company con- 

 sortium led by Sun Oil, which received the greatest amount of acreage in this sale. 



The Texas offshore lease sale benefited the contract drillers who had idle 

 shallow water equipment. The average offshore Texas water depth is only about 

 80 feet, with the deepest portion being about 120 feet. The SLAM Group (Signal, 

 Louisiana Land and Exploration, Amerada Petroleum and Marathon) recently set 

 a bid record of $94. 2 million for a 3, 400-acre drainage block which adjoins other 

 acreage held by the same group. The reserves in this block are apparently large. 

 Development of the Block will commence shortly and add innportantly to 1970 pro- 

 duction for these companies. In the Santa Barbara Channel, however, water 

 depths extend from 200 feet to 1, 600 feet, even though the farthest acreage is only 

 15 miles from the coast. This is due to the small continental shelf which exists 

 off the West Coast. The Santa Barbara accident, in which some 6, 000 barrels of 

 oil floated into Pacific waters from the initial leak, is covered in another section 

 of this report. 



It appears that offshore Louisiana acreage, still has the most potential 

 left. A vast assortment of pipelines criss-cross Louisiana's offshore waters and 

 numerous development platforms dot the area. Platform and pipeline construction 

 is continuing at a high pace in order to bring the large gas and oil reserves to 

 market. A substantial portion of the development work presently underway in this 

 acreage resulted from the 1967 offshore Louisiana lease sale which amply demon- 

 strates that if reserves are found in commercial quantities, a nriinimum time is 

 needed to bring these reserves to market. Discoveries have been made 

 by a vast assortment of individual operators and groups. Over 25 good discoveries 

 have been nnade so far on acreage leased in the 1967 Louisiana offshore sale. 



Alaska is quickly becoming a major source of domestic oil reserves. 

 While the focus is on the two North Slope discoveries of 1968, other areas appear 

 good. A substantial amount of production is already coming from the Cook Inlet 

 area in southern Alaska. Vast amoxints of the State's offshore acreage are frozen-out 



