The Katalla Oil Field lies 2-1/2 miles east of the village of Katalla and 50 miles southeast of Cordova. It was the first commercial oil development in Alaska, with first production reportedly occurring in 1902. Prior to 1931, forty-four wells were reportedly drilled in the area.  Of these, twenty-eight wells lay within the Katalla field, and 18 were produced.   A small refinery was built approximately 1 mile northwest of the field, and it operated from 1911 until 1933.  A total of 154,000 barrels were produced and sold locally, but on Christmas Day, 1933 the refinery burned and was never rebuilt.  During 1961, Richfield Oil Corporation drilled the Bering Unit No. 1 and No. 2 wells, which are located about 9 miles to the east and northeast.  Both wells were drilled slightly deeper than 6,000’ measured depth, then plugged and abandoned.  During 1969, Panoil Company began drilling the Katalla State No. 1 exploratory well in Katalla Bay.  The well was drilled to a depth of 426’, casing was run to 422’ and cemented, when the drilling crew noted numerous failures in the structural members of the barge.  The well was plugged and abandoned, and the casing was cut off 6’ below the mud line.   In 1985 and 1986, Alaskan Crude Corporation drilled the Katalla KS-01 exploratory well to a depth of 1,838’.  That well remains shut-in.  Under the 1982 “Chugach Natives, Incorporated Settlement Agreement,” Chugach Alaska Corporation was granted exclusive right to all the oil and gas in the Katalla Oil and Gas area until midnight, December 31, 2004.  At that time, the land is scheduled to revert to the United States, unless a well capable of producing in paying quantities has been completed.

Oil and gas seeps occur along the Gulf of Alaska coastline.  These seeps were undoubtedly discovered by local Native inhabitants, but Tom White is credited with the discovery of oil at Katalla in 1896. Most of the wells in the Katalla district, including the discovery well, were drilled on oil seeps or near other producing wells. Wells in the field appear to have produced from fractured sandstone and siltstone within the shaley middle part of the Katalla Formation, at depths ranging from 360' to 1,750'. Comparable zones of fractured rocks along faults or folds elsewhere in the Katalla district appear to offer the best possibilities for accumulations of oil in quantity equal to or larger than the Katalla oil field.  Most of the known anticlines are of small amplitude, are tightly compressed, and lack structural closure.  (USGS Open File Report 50 p. 63-64 and USGS Open File 75-508).