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|Total wells completed to December 31, 1984||962|
|Total oil wells to December 31, 1984||450|
|Total gas wells to December 31, 1984||120|
|Total service wells to December 31, 1984||0|
|Total dry holes to December 31, 1984||392|
|Well Density - approximately 2 per square mile (519 square miles in county)|
|Total cumulative oil production thru December 31,1982||8,068,649 barrels|
|Total cumulative gas production thru December 31, 1982||9,809,572 Mcf|
MUSKEGON - (Shortly after the 1925 Saginaw field discovery officially put Michigan in the ranks of commercially producing oil states; the discovery of the Muskegon, then Ml. Pleasant fields gave production proof that Saginaw was not just a fluke. The history and historical significance of Miiskegon County will be dealt with in detail immediately following the normal "statistical roundup" of a county profile, as penned by MOGN editor emeritusl liistorian Norm Lvon, whose narrative "Just in Time for Christmas, 1927" lias previously run on these pages and, like most good tales told by those who lived them, bears repeating. - ed.)
The production history of Muskegon County, 60th largest County in Michigan in terms of land area (519 square miles, 332,160 acres), 29th largest natural gas producer and 29th largest oil producer in the state thru 1982 dates back nearly as far as and was key in the making of Michigan's petroleum history.
In the six decades Michigan has been an oil and natural gas producing state, approximately 37,266 holes have been completed (including over 2,200 service wells), over 35,000 in the direct search for oil and gas in 73 of Michigan's 83 counties. Fifty-nine counties, all in Michigan's Lower Peninsula, have seen that search result in oil and gas production.
The Michigan Department of Natural Resources Geological Survey Division Annual Statistical Summary 38, (Michigan Oil and Gas Fields, 1982), attributes 18 designated oil and gas fields to Muskegon County. Through the end of 1982, the same volume attributes cumulative production of 8,068,649 barrels of oil and 9,809,572 Mcf (9.8 billion cubic feet) natural gas to Muskegon County.
Geologically, Muskegon County production has come from the "Berea" (Ellsworth Shale), Traverse, Dundee and Detroit River strata, from depths ranging from 1,050 to 2,073 feet. A single Salina-Niagaran 3 well field, the Montague Field, discovered in 1953 at 3,731 feet, produced 42.3 million cubic feet of natural gas from that year through 1970 abandonment.
The past decade, 1975-1984 have seen only 9 of Muskegon County's total 962 all time holes drilled, and until the beginning of this month it looked like this story would end on a note of "for the future . . . there are no immediate plans." Then on June 3, a drilling permit was taken by Trendwell Oil, Miller Brothers and Petrostar Energy for a 4,000 foot Niagaran targeted exploratory well in Section 2 of White River Township in Muskegon County's extreme northwest corner in an apparent attempt to extend the Niagaran reef trend still further southerly from Oceana County. At this writing the rig was moving in on the location, which if successful, could put the county in the current news ranks again.
Now for the in depth Muskegon County history . . . take it away. Norm, . . . JUST IN TIME FOR CHRISTMAS, 1927
SAGINAW WAS JUST OPENERS for an exciting second half of the 1920's. Before the decade was to close the Saginaw field development would be about over and in its place would be a bigger oil boom at Muskegon and the start of a still bigger one at Mt. Pleasant. Oil men in Ohio, Kentucky, Indiana as well as Michigan, not to overlook many local "amateurs," seemed convinced from Saginaw that Michigan was the immediate land of opportunity. Independents and companies from out-state commenced to take lease blocks beyond the confines of the Saginaw area. Local development companies were organized from one side of the state to the other. Numerous test wells showed gas and oil in many drillings from Gratiot county to Van Buren county, in Clare county, Oceana county, Mason county and more.
MUSKEGON AND MT. PLEASANT THE BIGGIES
But of all the shows or isolated wells none immediately opened fields to match the discoveries in Muskegon and near Mt. Pleasant. Before it was to become a "stripper" the Muskegon field would produce over seven million barrels of oil and seven billion cubic feet of gas. The Mt. Pleasant field would produce more and last longer and spinoff fields would be even larger.
From the drilling of salt wells and other borings in Western Michigan, Muskegon county was rated among the "more likely" provinces to have successful exploration for oil. Oil and gas shows were reported on wells drilled before the turn of the century.
Stanley D. Daniloff, a tailor by trade, was "bitten by the oil bug" and is credited with bringing about the organization in mid-July, 1926, of the Muskegon Oil Corporation, the late Charles (Carl) E. Myler, was vice-president of the fledgling oil company.
The first test well the company put down was on the Hazekemp lease. Section 20-10N-16W. It was drilled to 2,360 feet. It was dry but did carry light oil shows.
MR. REBER AGAIN
In the State Survey report of 1928 it is noted:
"Although the drilling of this well was somewhat prompted by geological evidence, the exact location was made by a Mr. Reber, who had been given credit for the discovery of the Saginaw field." Mr. Reber, who eventually fell out with the Saginaw Prospecting people, was credited with 19 for 19 at Saginaw, and while history is sometimes as fuzzy as old drilling records, it appears that Reber's reputation had reached Muskegon 100 miles away on the opposite side of the state.
In any event, when investors in the Muskegon corporation had checked their bank balances and decided that it was not time to quit exploring, a different approach was decided upon for the second location.
The Dixie Oil Company, a subsidiary of Standard of Indiana, was in the state and in Muskegon, and had already started to write leases. The company had Hugh D. Crider on the scene as its resident geologist. Dr. R. A. Smith, then state geologist, placed emphasis on the fact that Muskegon's second location was made by Mr. Crider, a "professional geologist," rather than Mr. Reber, irrestective of his Saginaw fame. (The writer has learned that Mr. Reber often consulted with Dr. Smith in Lansing, and that while Dr. Smith had a low opinion of his "methods" the state geologist often took time to explain to him his detailed ideas of the Saginaw structure. Some credit that with much of Reber's early success.)
Anyhow, the state geologist seemed real pleased that the Muskegon people took the advice of Mr. Crider on the best place to spend their money. (The writer surmises that it was a two-way street for all parties, good for Muskegon to have the benefit of a geologist, and good for Hugh to get a test hole drilled where his company had acreage.)
Crider proposed and Muskegon drilled on the Reeths 1, NW NW 9-ION-16W, Muskegon township, a location close to the town of North Muskegon and only four miles from the city of Muskegon. Much of the area already was subdivided and either in residential or industrial development.
SUCCESS ON SECOND TRY
The Reeths wildcat was a success. On Dec 8, 1927, gas was drilled (in the Traverse) at a depth of 1,640 feet. Drilling was continued until on Dec. 21 it started to flow by heads and increased to a peak of 330 barrels per day. However, the flow declined to about 50 barrels a day in the weeks ahead.
Immediately things begin to happen at Muskegon. Deals were made as fast as details could be arranged. Muskegon almost overnight was alive with "advance men" for big companies and independents arrived from across the state and eastern U.S.
Dixie soon offset the discovery well on some 200 acres it had acquired in its arrangement with Muskegon Oil Corp. and Muskegon, elated with its second test being turned into a discovery, lost no time in having its contractor. Gray Drilling Co., moved the rig over and start another well.
Muskegon did more. It expanded its lease holdings to some 50,000 acres as fast as its leasemen could work. And, it re-organized on a "more pretentious scale," to quote an early account. The Muskegon Development Company was organized with three subsidiaries for operating including the Citizens Petroleum Co., Lakeshore Petroleum Co. and the Juliet-Morris Development Co. The four were capitalized for $350,000 in addition to the $100,000 for the Muskegon Oil Corporation.
By mid-February, 1928, Dixie had one test drilling, Muskegon two, and J. S. Reed, Johnson Oil and Refining Co., Bower and O'Keefe, Bull Dog Oil and Gas, Citizens Petroleum, Mario- Caswell, Lake Shore Petroleum, Porter Hill and A. S. Cochran either had a test drilling or were moving on locations. This, as history now shows, was just the vanguard of companies and individuals that would sooner or later get piece of the Muskegon action.
Under the new arrangements, officers of the various companies included Stanley Daniloffas president and treasurer of the Oil Corporation; Charles E. Myleras president of the Development Co. and second vice-president of the Oil Corp. Leo M. Herkert was named president of Citizens Pet., and Edward J. Bowsma was the secretary. Willard Foster was the president of Lakeshore and Oscar Weinbord headed Joliet-Morris.
The first round of completions were made in the Traverse (spelled Travis and Travers in many early news accounts.) However, within three month other wells were completed for heavy flows of gas and oil at depths of 2,000 to 2,100 feet in the "so called Dundee." With the character of the strata in the Muskegon (west side) somewhat crudy at the base of the Devonian, many geologists called the zone Dundee with reservations.
DUNDEE PAYS OFF
Lima Oil Corp.'s Figge I, NW NW 9-ION-16W, completed on March 14, 1928, gassed at the rate of 5 million feet per day. On March 25, Dixie hit gas on the Reeths 1, east offset to the Figge, and gauged 4 million feet. The Reeths also "sprayed oil" at the rate of some 30 barrels per day. Lima and Dixie with their "deep gas wells," as later events proved, had unknowingly set in motion a chain of events that would be both of great added value to the Muskegon development and also a compound 'headache. The gas in the field would bring over-expansion of markets and eventual cut-offs to users. The Dundee oil would participate a fight, a heartbreaking cut in crude prices and more refining plants than the field could support.
In only four months oil production had climbed to 1,000 barrels a day from seven wells and two others were called gas wells, - the "largest in the state."
First drilling was centered in sections 9 and 9-10N-16W, Muskegon township, just outside of North Muskegon's town limits.
Dixie (Standard of Indiana) immediately established itself as No. I in gathering and purchasing crude oil. The first went to the company's just opened new plant at Zilwaukee near Saginaw. It brought $1.35 a barrel.
Muskegon Traction and Lighting Company, with the greater Muskegon gas franchise (then all manufactured gas) indicated it was interested in tapping the new natural gas supplies. Besides the two new gas wells the producing oil wells were flaring gas at the rate of a million feet a day.
70 DRILLING RIGS
By November, 1928, the Muskegon Chronicle estimated that 1,000 persons were engaged in some form of the new oil industry. The newspaper reported that "about 70 drilling rigs are running" and drillers "receive $10 a day and tool dressers $9, with a pair working each 12 hours around the clock while drilling goes on."
A survey, the paper said, would show an investment of $2 million with another $1 million involved in current drilling operations. This was broken down to $500,000 leases, $1,250,000 for drilling 100 wells and $400,000 for oil and gas lines and other field services.
Well costs, for a producer, the Chronicle reported, were about $12,000 for the Traverse and $15,000 for the Dundee. On a "dry hole" basis and some "poor boy" wells, costs were said to average nearer $10,000.
Office and warehouse rentals, storage tanks, rail shipping facilities, equipment storage yards, freight loadings and supply stores could "add up to make the total expenditures much more" the paper said.
The newspaper reported that "about 30 drilling contractors" were in the field by late 1928, but no attempt was made to estimate the number of leasemen, promoters and scouts that "have jammed the Occidental Hotel."
SHORTAGE OF TEAMS
A shortage of teams to move equipment besides the 12 trucks was noted. "It is estimated that at least 20 teams and as many diver - skinners - are working steadily at $10 a day for team and driver. Teams are used for most of the field work but the trucks are kept busy moving rigs, boilers, casing and so on from railroads into the fields.
Five oil field supply stores moved into Muskegon within 6 to 8 months of the discovery.
In 1929, Muskegon accounted for 347 well completions of which 264 were oil wells, 23 were gas wells and 60 were dry holes. It was mostly downhill from then on.
Oil production peaked in 1929 with 3.1 million barrels and was down to 1.2 million in 1930. The peak month was in August 1929 with 557,140 barrels. Gas sales peaked in March of 1929 with 427.8 million cubic feet.
By Jan. 1, 1931 there had been 629 wells completed or started. Of the 439 completed 304 were Dundee oil wells, 48 were Dundee gas wells, 57 were Upper Traverse oil wells, 14 were Lower Traverse gas wells, 14 were Lower Traverse oil wells, two were Monroe gas wells and 64 were dry holes, according to a Robert B. Newcombe (assistant state geologist) report in 1932. As of Jan. 31, 1931, Newcombe calculated the field's oil production at 4.8 million barrels and the gas production at 5 billion cubic feet.
The State Survey's 1973-74 yearbook credited Muskegon with just over seven million barrels of oil all-time and 7.2 billion feet of gas all-time.
Production now had dwindled to only a dozen wells, and oil production in 1973 was only 2,540 barrels with no record of gas production.
The development area covered approximately 3,170 acres, which on the basis of 600 completions, dry and productive, represents well saturation of about one of five acres. It was closer in some localized spots and one to 10 where larger tracts existed.
Contractors often "took a ride" in the drilling of a well. Deals where contractors required $6,500 to $8,000 in cash and the rest in a "ride" were often reported. The "ride" could be anything from one sixteenth to one-fourth, depending on what the traffic could stand.
LEASE PRICES SOAR
In the face of drilling successes and competition the price to developers for leases mounted quickly. Where $1 an acre rental or 25 cents an acre with "free time" was about par until the boom unfolded, prices climbed to the $5 an acre rental level soon. Cases of $10 to $50 and in one instance $2,500 were reported but these were not "everyday."
A headliner in mid-1928 was when A. S. Cochran and associates were reported to have received $10,000 from Bowers Oil Company for the SW SE (40), Muskegon township, where Cochran had drilled a small Traverse well. Bowers deepened the well into the Dundee and picked up a 14 million flow of gas.
Development of the time was not confined to the Muskegon field. Deals and drillings spread into many west-side counties. Muskegon Development and its three affiliates. Citizens, Lake Shore and Joliet worked out a deal with Dixie to core test 60,000 acres in Ottawa county. Later the same group banked $125,000 for core tests and deep drilling in Shelby, Hart, Weare, Pentwater, and Benona townships of Oceana.
In April, 1929, the Pennsylvania Oil and Gas Company reported 400 feet of oil and 200,000 feet of gas near Walkerville in Oceana county in Leavitt township. In December the same company reported oil and water in Section 32 of Goodwell township, Newaygo county at 2,797 feet.
A 1929 summary of drilling wells credited four tests to Mason county with one oil well, two gas wells and one dry hole. (Presumably the Taggart and Welch drilling in Logan township.)
Selected materials on this page copyright 1991 by Michigan Oil & Gas News, Incorporated.
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