History
DeGolyer and MacNaughton was formed in 1936 in direct response to an industry in dire need of more scientific methods. Following the Drake discovery in 1859, the early oil industry in the United States was at the mercy of boom-and-bust cycles. Closely spaced wells flowed wide open, accelerating the depletion of oil. Natural gas, necessary to move inert crude, was discharged into the air, exhausting this potential energy source. Inaccurate and incomplete assessments of reservoir conditions, together with primitive production practices, led to great losses in potential reserves. Had such procedures remained unchecked, billions of barrels of oil might never have been produced.
By the 1930s, oil production under the old open-flow system overwhelmed limited markets, and oversupply threatened the oil industry’s economic life. The nation was forced into conservation through proration, catalyzing a need for better engineering techniques in petroleum production. Scientific methods and conservation principles began stabilizing the shaken industry. But when bankers began to cautiously proffer long-term loans secured only by the unseen underground collateral of oil reserves, they had to rely on the integrity and competence of those assessing the properties. More innovative financing methods were needed, and that created a need for reliable independent reservoir studies and evaluations. Everette Lee DeGolyer and Lewis MacNaughton formed DeGolyer and MacNaughton to meet such needs, and heralded a new era in the economics of energy.
Since 1919, oil professionals have regarded Everette Lee DeGolyer as the pioneer in geophysical exploration. Few, if any, individuals have founded or headed more enterprises of transcending importance to the international oil industry. From the discovery of the world’s greatest oil well at the time (before he had even graduated from college) to forecasting the huge Middle East reserves, DeGolyer’s legendary career was marked by brilliance, confidence, patience, and foresight. His enduring stature in the industry is illustrated by DeGolyer’s peers’ creation of the DeGolyer Distinguished Service Medal to recognize distinguished service to the petroleum industry.
Lewis MacNaughton was an extraordinarily talented geologist who, like DeGolyer, had also gained solid work experience overseas prior to obtaining his college degree. In 1928, DeGolyer, the then-president of Amerada Petroleum Corporation, hired the scholarly, methodical MacNaughton. Upon DeGolyer’s retirement in 1932 (at the young age of 46), financial institutions and oil companies continued to call DeGolyer, ceaselessly seeking advice based on his scientific professionalism and non-provincial perspective. Faced with the inevitability of an increasing demand for reliable, realistic consultation, DeGolyer prevailed upon MacNaughton to join him in the first petroleum consulting organization to provide services on an international scope. Together, the two men forged a firm that would become the petroleum industry’s most sought-after advisor.
DeGolyer and MacNaughton continues to provide unbiased, expert services to the global petroleum industry, and the original partnership traits are still evident after more than 80 years: the pioneering spirit, the desire to innovate, a quest for scientific knowledge, and the ability to apply this knowledge creatively and honestly.
