Colorado’s hydrocarbon industry was built on the foundation of early explorers and field geologists venturing through rough and often dangerous terrain, surveying and mapping in a young nation at a time when geology was in its technological infancy. Without even the aid of a Brunton compass (patented 1894) early geologists, such as Ferdinand Hayden and John Wesley Powell, created the beginnings of Colorado’s geological knowledge through exceptional skill and work, upon which we continue to build today.
Though geological knowledge was growing as the demand for hydrocarbons increased, it is unclear whether the information was widely available or to what extent it was utilized in the early days (Elements of Petroleum Geology, 2nd ed.) of hydrocarbon exploration. Richard Selley colorfully describes the early oil finders as, “wandering about the countryside with a naked flame, optimism, and a sense of adventure.” While this was likely not true of all early oil finders, optimism and luck were certainly vital. The key to Colorado’s early success lay in the surface expression of hydrocarbons in the form of oil seeps. The first productive oil fields, the Florence and Rangely fields, were discovered in the vicinity of oil seeps derived from fractured shales, and the third, Boulder Field, exhibited characteristics that reminded its discoverer of Florence.
The first petroleum was discovered near the frontier town of Cañon City, where oil flowed to the surface as an oil spring. While the oil spring had been long used by the Ute Indians for war paint and medicinal purposes, the credit for the discovery went to Gabriel F. Bowen who staked a claim on the oil spring on Sept. 3, 1860. The oil spring emanated from the Jurassic Morrison Formation, migrating upward through fractures from the Cretaceous shale hydrocarbon source. It was located on Four Mile Creek, approximately six miles north of the town of Cañon City, where a plaque still marks its location. Oil production from the spring was enhanced by sinking a well over the spring. It was four inches in diameter with wooden shafts and was sunk to a depth of 23 feet. This was the first oil well in Colorado. Production from the spring amounted to approximately half a barrel of oil per day and was produced by a variety of owners until 1872, when the claim was jumped using homesteading laws and Civil War script.
One of the seep’s owners was Alexander Cassiday (1827–1887), who has been called the “father” of the Colorado oil industry. Cassiday was an ambitious and enterprising man who saw potential in drilling for the oil spring’s source. He promoted this potential and brought investors to the Cañon City area. Numerous wells were drilled in the area around the oil spring, but in the 20 years following the oil spring discovery, the mother lode – the source of the oil spring – was never found. By then, cheap eastern oil was transported on the railroads and investors pulled out of the Cañon City Embayment. Cassiday, while still believing in the oil potential, turned instead to coal mining, for which he was able to raise investment capital.
Cassiday’s coal mine extended southeast from the town of Brookside where it met up with Isaac Canfield’s coal mine. Together, Cassiday and Canfield convinced their investors that they needed to drill a water well to supply their mines. They began drilling in December 1880 and struck oil in January 1881 at a depth of 1,445 feet. The well was located just south of Coal Creek, south of the Arkansas River, and more than 15 miles south-southeast of the oil spring. This was the discovery well for the Florence Oil Field, Colorado’s first, and the first in the Rocky Mountain West. The well was originally reported to have good initial oil shows but only produced a few barrels of oil due to a lost tool.
With the discovery, investment in the Cañon City Embayment boomed and the race was on to develop the Florence Oil Field. Production came primarily from the fractured Cretaceous Pierre Shale which overlies the organic-rich Sharon Springs Formation. People seeking work and eager investors flocked to the small frontier town. A man named Peabody founded the Lobach Oil Company which competed with Cassiday’s Arkansas Valley Oil Company to produce the most oil. These companies dominated development from 1883 to 1887. By 1930, production had exceeded 12 million barrels of oil, with the discovery of a second field, the Cañon City Field, in 1926, adding a second boom to the area. Drilling and production in the Cañon City Embayment continues today with cumulative production exceeding 16.4 MMBO.
Oil exploration in the Boulder area began as early as 1892 to explore some reported “oily odors” and an oil spring located approximately 17 miles north of the town of Boulder. Isaac Canfield, who co-founded Colorado’s oil industry, was drawn to Boulder, perhaps recognizing from F. V. Hayden’s map of a wide outcrop of the Pierre Shale near Boulder, suggesting that the Florence Field pays could be found there at a shallow depth. In 1901, dowsing with a forked stick by Canfield’s group led to the Boulder discovery, known as the McKenzie Well. It produced 60–400 barrels of oil per day, pumping from about 2,500 feet. However, the crew dropped a bailer, and the well was lost. A twin well was drilled next to it, and the McKenzie No. 1-21 produced oil for a century. This was the discovery well for the Boulder Oil Field just outside the eponymous university town 25 miles northwest of Denver. In January 2005, the McKenzie No. 1-21 was the only well still producing in the field – since plugged – and was formally recognized on the National Register of Historic Places.
The Boulder Oil Field is the second oldest field in the state and one of the oldest productive anticlines in the West. Located at the western margin of the Denver Basin, the field is associated with one of the en échelon anticlines near the foothills of the Front Range. A nose and small closure, whose axes are roughly parallel to the mountains, control the field structurally. As at Florence, production is from sand lenses and fold-related fracture porosity in the Pierre Shale, which is also the source rock. Fractures have contributed most of the production. Early wells were drilled with cable tools, and production generally came from depths of 800 to 3,000 feet. Most wells were shot with nitroglycerin to improve production. About 100 wells were drilled in the first few years; nearly 200 have been drilled in all, most of them dry holes or marginal producers. The field was discovered the same year as Spindletop in Texas, and its early development shares some of that boomtown excitement.
Boulder was the focus of a forgotten boom and a growing population. More than a hundred oil companies sprouted up and promoters promised “Oil or money refunded.” One University of Colorado professor (later to become the state geologist) raised $500,000 – equivalent to several million dollars today. A now-famous pioneer photographer, the dapper Rocky Mountain Joe Sturdevant, a brazen, self-styled “mountain man,” used doctored pictures to promote investment. Wells were drilled with “other people’s money” and with little or no financial reward for most investors. The wily Canfield got out early, in 1902.
Some predicted that the field would stretch to the Wyoming state line. While this wasn’t the case, Boulder Field opened the oil industry of the Denver Basin and played a key role in making the Mile High City the energy center of the Rocky Mountain Region. The development of the vast Wattenberg Field and the horizontal Niobrara/Codell plays succeeded in stretching production past the Wyoming state line. The last production in the Boulder Oil Field, from the McKenzie No. 1-21 well, occurred in 2006 and the area, once covered in oil wells, has become an excellent example of restoration. Recent preservation of the McKenzie Well within a famously liberal college town offers the lesson that natural resources, including oil, occur even in places where exploration and production may be unpopular. Historic recognition of this field safeguards a rich chapter in the history of oil and gas development in the West.
The third oil seep, emanating from fractured Mancos Shale (partially equivalent to the Pierre), was discovered in Rio Blanco County, western Colorado, leading to the discovery of Rangely Field. The field’s structure is anticlinal, which was first recognized by C.A. White during the 1875 Hayden Survey. While oil interest in the area dates to around 1890, the discovery well wasn’t completed until May of 1902, not long after the Boulder Oil Field discovery. The first well, the Pool well, was drilled to a depth of 2,100 feet but produced one to three barrels of oil per day from the Mancos Shale at a depth of 750 feet. The target of this first well was the Dakota Sandstone, but the Mancos Formation was thicker than expected.
The Dakota Sandstone never lived up to expectations. Once it was penetrated, it had high initial gas flows, and blowouts were common, but these wells soon watered out. There are no records of the Dakota gas being exploited commercially or of any significant oil production. One well that penetrated the Dakota blew out at an estimated 90 million cubic feet per day. This gas was then ignited by lightning and is reported to have burned spectacularly for 20 days before going to water. While likely apocryphal, it is said to have burned with a 1,000-foot flame that lit the entire Uinta Basin. Later, deeper production came from the Pennsylvanian Weber Sandstone, which is the major producing unit in the Rangely Field.
Early field development was slow. Production rates were modest, and this portion of northwestern Colorado was 225 miles from the nearest market for oil, Salt Lake City, Utah. In 1918, the Raven Oil Company constructed a small refinery with a daily capacity of 250 barrels of oil. Refinery equipment was carried by wagon over the rough roads from a railhead at Dragon, Utah. Gasoline, kerosene, and other products were marketed locally in Colorado and nearby parts of Wyoming and Utah.
By 1924, fractured Mancos Shale wells were producing between 1,500 and 2,000 barrels per month. Good wells only produced a few tens of thousands of barrels, although exceptional wells exceeded 100,000 barrels. Ultimately, the fractured Mancos would yield more than 23 million barrels of 41 gravity crude at depths less than 3,500 feet. Deeper oil production from the Weber Sandstone, which has yielded nearly 1 billion barrels of oil, was not to come for another 30 years after the Mancos oil discovery.
Precursors to the vast shale plays of today, the fractured shale plays were ideal for Colorado’s early production. They were identifiable from surface evidence in the form of seeps and the plays were shallow. This made for easier production during a time when oilfield technology was in its infancy. Each of these plays also represents different orders of magnitude in terms of production, with the Boulder Oil Field producing less than one million barrels of oil, the Cañon City Embayment producing in the tens of millions of barrels and Rangely in the hundreds of millions of barrels or more (though only in the tens of million from the fractured shales).
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