Eight areas within Arizona have potential for commercial production of hydrocarbons or industrial gases (Figure 1). In addition, at least 14 Tertiary basins, which have not been adequately tested, contain evidence of hydrocarbon source and reservoir rocks. These conclusions are based on the following evidence: (1) current production of oil and natural gas in the northeastern part of the state, (2) past production of helium in the Holbrook Basin, (3) recent discovery of carbon dioxide in the Holbrook Basin, (4) surface seeps of tar and high gravity oil, (5) outcrops of petroliferous rocks, and (6) shows of oil and gas in wells. The status of drilling and indications of hydrocarbon potential in each area are described in this report.