1859 – 1879: The Birth of an Industry

When Edwin Drake drilled the first viable oil well in 1859, the world’s economic landscape was forever changed by the launch of an industry that would power massive industrial growth and revolutionize transportation in the years to come. The frenzied drilling that followed Drake’s discovery in western Pennsylvania unleashed a supply of oil far exceeding the needs of the limited market at that time. In response to this oversupply, oil prices plummeted from an annual average of $16 per barrel in 1859 to 49 cents per barrel in 1861. At times the 42-gallon wooden barrels used to transport the oil cost more than the fuel they contained. Such swings in supply and demand have caused oil and natural gas producers to face pricing upheavals throughout the industry’s history.

In this year’s annual report, Swift Energy Company highlights historic events that illustrate the challenge of the volatile pricing environment that oil and natural gas companies of yesterday and today have had to strategically manage.