Elk Hills, in the folded hills southwest of Bakersfield, carries more history per acre than almost any American oil field. Discovered in 1911 and set aside by President Taft in 1912 as Naval Petroleum Reserve No. 1, it was entangled in the Teapot Dome scandal of the 1920s, held largely in government hands through the Cold War, and sold to Occidental Petroleum in 1998 in the largest federal privatization to that date. With roughly 1.5 billion barrels of oil produced plus major gas volumes, it is today the flagship asset of California Resources Corporation.
Associated Oil Company completed the field’s first well in 1911, and within a year the government moved to secure the oil for the Navy, designating Elk Hills as Naval Petroleum Reserve No. 1 in 1912. A decade later, Interior Secretary Albert Fall secretly leased the reserve to Edward Doheny’s Pan American Petroleum in exchange for money — the California half of the Teapot Dome scandal that sent Fall to prison.
For most of the twentieth century Elk Hills produced only intermittently, held as a strategic reserve with Standard Oil of California as the government’s partner. After the 1973 oil embargo, Congress opened the field to full production in 1976, and it quickly became one of the most prolific fields in the country, at times among the top ten producers of both oil and natural gas in the lower 48.
In 1998 the Department of Energy sold the government’s stake to Occidental Petroleum for about 3.65 billion dollars, then the largest privatization of federal property in United States history. Occidental spun off its California operations in 2014 as California Resources Corporation, which operates Elk Hills today as its cornerstone asset, complete with a field-scale power plant and gas processing complex.
Elk Hills is a large doubly plunging anticline on the southwestern flank of the San Joaquin Basin, with production stacked through several thousand feet of section. The deep Stevens sands — turbidite sandstones within the Miocene Monterey Formation — hold the highest-quality oil, while the Shallow Oil Zone in the Pliocene section and a substantial Dry Gas Zone add separate producing systems. Unlike its heavy-oil neighbors, much of Elk Hills produces lighter crude and significant natural gas, which is why pressure maintenance rather than steam has dominated its development.
Recovery at Elk Hills relies on waterflooding and gas injection rather than steam: injected water and produced gas returned to the reservoir maintain pressure and sweep lighter oil toward producing wells. That matters for royalty owners because these barrels flow at lower operating cost per barrel than thermal projects, and the field also generates gas and natural gas liquids revenue streams. Injection operates under CalGEM underground injection permits, and CRC has also advanced carbon-storage projects at Elk Hills under EPA Class VI permitting — a factual signal of the company’s long-term plans for the field’s pore space.
Elk Hills royalties draw on diversified revenue — oil, gas, and NGLs — from a field its operator publicly treats as a flagship, which supports continued investment. The counterweights are natural maturity and a state permitting climate that limits new drilling statewide. Because the federal government historically owned most of the field, private royalty interests here are concentrated in specific tracts and units, so lease-level detail matters even more than usual. We evaluate exactly what you own, and we buy minerals and royalties in Kern County and provide free written offers.
County-level well data, production charts, and selling guides for the counties this field spans:
The federal government owned most, but not all, of the reserve; Chevron’s predecessor held a share, and private interests exist in and around the field’s units. After the 1998 sale to Occidental and the 2014 spin-off, California Resources Corporation became the operator paying on those interests.
Often yes. Elk Hills is one of California’s largest gas-producing fields, and many interests are paid on oil, gas, and natural gas liquids. Your check detail will itemize products — gas volumes can be a meaningful part of value here, unlike in the heavy-oil steam fields nearby.
CRC has pursued permits to store carbon dioxide in deep zones at Elk Hills. Whether that touches your interest depends on your deed’s scope and tract location. It does not change existing royalty obligations on producing wells, but it is worth understanding what rights you hold before selling or leasing anything.