Historic Midland

ARCO
Permian
ARCO Permian’s history goes back to 1911
with the dissolution of Standard Oil into eight
separate oil companies. One of those was
Atlantic Refining Company.
Atlantic moved into Central Texas in 1919,
and in June 1920, sent geologists Vern Woolsey
and Niles Winter to Big Spring to examine samples
from cable tool rigs drilling in Howard and
Glasscock Counties.
Winter did preliminary work on the
Westbrook discovery in Mitchell County, which
opened the Permian Basin, and Atlantic was
interested, but before they made any transactions,
the opening of an oilfield in Arkansas
diverted them. Winter left Texas and when he
returned in 1927, Atlantic was in the process of
acquiring leases in McCamey.
One deal they were looking at could only be
had if they also agreed to buy a part of the
Hendrick lease in Winkler County, which later
proved to be the giant Hendrick field. Atlantic’s
largest Hendrick well potentialed at 53,000
bopd.
They ran a pipeline from Midland to the field
to accommodate the flow, finishing about three
weeks before the precipitous drop in the price of
oil to 10 cents per barrel, and the Railroad
Commission’s decision to prorate production.
Then there was Block 31, near Crane, where
Atlantic Refining Co. created the world’s first
large-scale miscible displacement by high-pressure
gas injection. Atlantic Richfield Company
discovered the Block 31 field on the Texas
University Lands System in 1945, with a well
which had the potential to produce 408 barrels
of oil per day in the Ellenburger, its primary
objective, and with 772 BOPD in the Devonian.
Left to its own, and under conventional recovery
methods, the field would certainly have
proved its worth, but by utilizing the high-pressure
gas injection process, the Company has
already recovered more than 230 million barrels,
with expectations of eventually recovering
more than 40 percent of the original oil in place.
But perhaps the ARCO Permian history most
remarkable is also its most recent.
ARCO restructured in December 1993, and
the company was divided into 11 basic business
units. ARCO Permian, headquartered in
Midland, was charged with “harvesting” its
declining fields which, according to the longrange
plan, would be completely depleted in 20
years or less.
The Midland management team began to
study the Permian Basin’s potential and found
that the Permian Basin has the most remaining
proven reserves of the four major basins in the
lower 48 states.
“Our research showed that there is still 12 to
15 billion barrels equivalent of yet-to-be-recovered
oil and gas here,” said ARCO Permian Vice
President, Jerry Hays, “and we began to change
our way of thinking.”
President Tony Best directed all employees to
“howl like a coyote” if they saw a problem and
empowered them to act “with the flexibility of
an independent producer, backed by the assets
of a major,” creating relationships with independents
and individuals to form profitable partnerships.
ARCO Permian is now the largest oil operator
headquartered in the Permian Basin, with
reserves and revenues that have increased every
year since 1994. It has bought the building
where the offices are located, and employees
have the opportunity to spend their entire
careers in Midland. Furthermore, the company
has gained the respect and admiration of the
business community throughout the region and
throughout ARCO’s corporate offices nationwide.
“We went from being road kill to the leader
of the pack,” says Best.
102 ✦ HISTORIC MIDLAND