Kelly-Snyder field is a giant oil-producing area in western Scurry County on the eastern edge of the Permian Basin. It draws from a 6,700-foot solution gas-driven reservoir, the Canyon Reef formation located in the Horseshoe Atoll, one of the largest subsurface limestone reef mounds in the world. The atoll, as defined by later drilling, is 175 miles long, stretching beneath western Kent and western Scurry counties before turning south under Borden and Howard counties and moving northwest across the subsurface of Dawson, Martin, Gaines, Lynn, and Terry counties. Although several fields produce from the Canyon Reef formation in the atoll, Kelly-Snyder is the most prolific. Its cumulative production at the beginning of 1993 was 1,227,626,890 barrels of oil. Oil exploration around the reef began in the 1920s, when independent prospectors drilled in the area, finding only marginal production. Then in 1938 and in 1948 two major oil companies-Gulf Oil Corporation and Humble Oil and Refining Company (now Exxon Company, U.S.A.)-drilled into the atoll where both could have brought in producing wells. However, neither recognized the significance of its discovery. In 1938 the Gulf No. 1-B Swenson Land and Cattle Company in northeastern Garza County drilled to a total depth of 8,104 feet and was plugged back to 7,334 feet. Over five months the well was tested, perforated, and acidized, but its best daily production was 160 barrels of oil and 166 barrels of water. Convinced that the well would never produce commercially, Gulf abandoned it in March 1939. The importance of the well, the fact that it had found oil in the Pennsylvanian section, was missed.
Although Gulf tried to make a well of the No. 1-B Swenson, the operators of the second well to drill into reef did not. The Humble No. 1 T. C. Davis, staked near the northwestern edge of the later-discovered Kelly-Snyder field, drilled 200 feet of the reef without testing the zone or attempting to bring in a well. The hole was abandoned at a total depth of 8,027 feet in Ellenburger dolomite. Standard Oil Company of Texas reentered the hole in April 1950, making a well and extending Kelly-Snyder field. The first reef discovery in Scurry County came in July 1948. It was the Sun Oil Company and Humble No. 1 Emil Schattel, at a total depth of 6,891 feet. Its initial flow was 480 barrels of oil per day. The success of the No. 1 Schattel renewed interest in prospecting in the area, and several reef fields were quickly discovered. On November 5, 1948, Magnolia Petroleum Company completed the No. 1 Winston Brothers, which pumped 67 barrels of oil and 28 barrels of salt water per day from a total depth of 7,905 feet in the Canyon Reef formation. It was the discovery well for Kelly field. Only fifteen days later the Standard No. 1 Jessie Brown 2 was completed at a depth of 6,414 feet with an initial potential of 532 barrels of oil per day. It, too, had found production in the reef, and the No. 1 Jessie Brown 2 opened North Snyder field. At the end of 1948 Kelly field reported one pumping well with yearly production of 425 barrels of oil, and North Snyder field recorded one flowing well with an annual yield of 6,498 barrels of oil. Before the end of January 1949 the two fields were combined under the name Kelly-Snyder field, when the Railroad Commission of Texas ruled that they produced from one reservoir.
Development in the combined field started the year slowly with no new wells completed until May 1949, when three wells were noted and monthly production increased to 4,010 barrels of oil. At the end of September 1949 the field consisted of fourteen wells, and by the end of the year that number had climbed to fifty-three. With twenty-three operators in the field, annual production for 1949 was 425,111 barrels of oil. After operators in Kelly-Snyder field proved they had tapped into the highly productive Canyon Reef, drilling activity spread to the north and the southwest in attempts to extend the reef play. Drilling excitement, however, spread in all directions, brewing a classical oil boom. Oilfield workers came into Snyder in large number and faced shortages in housing and city services. Natives of Scurry and surrounding counties were distrustful of the boomers and feared the social changes that came with the discovery of oil. The boom grew quickly, inspired by cheap drilling costs and favorable allowables. The supply of high-gravity crude was prolific and waiting at 6,700 feet, a relatively shallow depth that allowed wells to be drilled economically and to be paid out within weeks of discovery. Leases were small. Maximum spacing for wells was forty acres, usually at the center of quarter-quarter sections. Allowables, based one-half on well potential and one-half on acreage, were favorable. With these incentives, drilling intensified until it peaked in February 1950, when 179 rigs were digging in Scurry County. On March 1, 1950, the Railroad Commission noted the rapid development of each newly discovered reef field and the large volumes of new oil sent to market. In an attempt to conserve the reef reservoirs, the commission ordered a bottom-hole pressure survey of all wells in the reef at six-month intervals. The results revealed that pressures had dropped from 3,122 pounds per square inch when production began to 2,850 psi in March 1950. In an attempt to preserve pressure, the daily allowable per well was cut to 110 barrels for each of the seventeen producing days permitted in March 1950.
To market production five pipeline companies laid lines into Kelly-Snyder, and two plants were built in the field by the summer of 1950. Paso-Tex Pipe Line Company maintained two parallel lines-an eight-inch and a six-inch-to the Colorado station of Basin Pipe Line Company in southern Scurry County, where the six-inch carrier of Pan-American Pipe Line Company, carrying Kelly-Snyder production, also terminated. Magnolia Pipe Line Company operated a six-inch line to its Scurry station, meeting its main line to Corsicana. Texas-New Mexico Pipe Line Company completed a ten-inch connecting line to the field. Gulf Pipe Line Company ran two carriers from its Roscoe station to link the field to its trunk line with the Texas coast. Standard of Texas constructed a high pressure absorption-type casinghead gas plant with initial capacity of 30 million cubic feet per day. Fullerton Oil Company built a refrigeration-type gasoline plant with a capacity of 40 million cubic feet per day and the ability to recover six gallons of liquid petroleum gas per thousand cubic feet of gas. With the pipelines and processing plants in operation, field production peaked at 130,000 barrels of oil per day by the fall of 1950. At the end of the year Kelly-Snyder field reported 989 wells, 72 operators, and cumulative production of 20,774,279 barrels of oil, but the flush production from the field over the previous two years concerned the operators and royalty owners. By January 1951 those who had an economic interest in the reef fields realized the necessity of preserving reservoir pressure, which was lost by rapid production. Engineers predicted that only 19 percent of the oil in the reservoir could be forced out without a pressure-maintenance program. To study the effects of pressure maintenance and of unitization on the field, operators and royalty owners formed Scurry Area Canyon Reef Operators Committee in January 1951.
In July 1951 pressure-maintenance attempts were made in two separate one-well pilot gas-injection projects by Lone Star Producing Company and by Standard Oil. Although the pilots improved pressure in the immediate areas of the injections, they effected little change field-wide. During the year production increased to 27,649,183 barrels of oil, and field pressure dropped to below 1,800 psi. The reservoir continued its decline. By October 1952 the stability of the reservoir was in jeopardy after pressure dropped to 1,675 psi, although annual production declined in 1952 by more than 2.5 million barrels of oil. Allowables, based 25 percent on the well and 75 percent on acreage, did not check production enough to maintain the reservoir. On March 1, 1953, Kelly-Snyder field began to operate as the SACROC Unit. Throughout the remainder of 1953 and 1954 unit operators worked to maintain reservoir pressure. Although annual production in the field dropped by more than 1.5 million barrels of oil in 1953, reservoir pressure continued downward. In September 1954, when average reservoir pressure dipped to 1,546 psi, SACROC initiated a centerline waterflood to improve the reservoir. By the end of the year production in the field was cut to 19,342,529 barrels of oil. In 1968, after closely monitoring the reservoir, the SACROC Engineering Committee recommended injecting carbon dioxide followed by water into 202 wells in the flank areas of the reservoir to increase pressure and to improve the ultimate recovery efficiency. In 1971 the large-scale carbon dioxide miscible flood began in the field, and by April 1972 it succeed at increasing the gas-oil ratio and at flushing out oil left in place after the waterflood.
Sometime near mid-year in 1979 operators in Kelly-Snyder field recovered the billionth barrel of oil. At the end of 1988, after forty years of production, Kelly-Snyder field had witnessed the drilling of a total of 1,672 wells, and the mature field reported annual production of 10,762,241 barrels of oil and 37,101,485,000 cubic feet of casinghead gas from 792 producing wells. On January 1, 1993, the field consisted of 530 producing wells, yielding yearly production of 6,345,925 barrels of oil and a lifetime total of 1,227,626,890 barrels of oil.