Expenditures For Petroleum and Natural Gas Well Drilling, Constant Dollars for United States

In my review of The Big Rich: The Rise and Fall of the Greatest Texas Oil Fortunes by Bryan Burrough, I ask,

"why were these independent Texas oilmen able to discover - and end up controlling - huge oil fields during the 1930s? After all, this was sixty years after Standard Oil was formed and twenty years after it was broken up in to the Seven Sisters. How could these thinly capitalized independents have had an edge over big oil companies? (And they were thinly capitalized, often spending their last dollar on drilling and then paying their workers in groceries.) The answer is that the Great Depression caused the major oil companies to slash their budget for capital expenditures like exploration, and this retreat left a vacuum for the hungry Texas wildcatters to fill."

I found a data series that confirms this: Expenditures For Petroleum and Natural Gas Well Drilling, Constant Dollars for United States.

You can see that by 1932 these capital expenditures dropped 60% from the peak. The first expenditures to get cut would be exploratory (longest time to cash flow), so those were probably cut almost entirely. Thus, the vacuum for the hungry Texas wildcatters to fill.