Gravity anomalies, historical records of exploratory oil wells and oil seeps, new organic-geochemical results, and new stratigraphic and structural data indicate the presence of a concealed, oil-bearing sedimentary basin beneath a highly urbanized part of the Santa Clara Valley, Calif. A conspicuous isostatic-gravity low that extends about 35 km from Palo Alto southeastward to near Los Gatos reflects an asymmetric, northwest-trending sedimentary basin comprising low-density strata, principally of Miocene age, that rest on higher-density rocks of Mesozoic and Paleogene(?) age. Both gravity and well data show that the low-density rocks thin gradually to the northeast over a distance of about 10 km. The thickest (approx 4 km thick) accumulation of low-density material occurs along the basin's steep southwestern margin, which may be controlled by buried, northeast-dipping normal faults that were active during the Miocene. Movement along these hypothetical normal faults may been contemporaneous (approx 17–14 Ma) with sedimentation and local dacitic and basaltic volcanism, possibly in response to crustal extension related to passage of the northwestward-migrating Mendocino triple junction. During the Pliocene and Quaternary, the normal faults and Miocene strata were overridden by Mesozoic rocks, including the Franciscan Complex, along northeastward-vergent reverse and thrust faults of the Berrocal, Shannon, and Monte Vista Fault zones. Movement along these fault zones was accompanied by folding and tilting of strata as young as Quaternary and by uplift of the modern Santa Cruz Mountains; the fault zones remain seismically active. We attribute the Pliocene and Quaternary reverse and thrust faulting, folding, and uplift to compression caused by local San Andreas Fault tectonics and regional transpression along the Pacific-North American Plate boundary.

Near the southwestern margin of the Santa Clara Valley, as many as 20 exploratory oil wells were drilled between 1891 and 1929 to total depths as great as 840 m. At least one pump unit is still standing. Although no lithologic or paleontologic samples are available from the wells, driller's logs indicate the presence of thick intervals of brown shale and sandstone resembling nearby outcrops of the Miocene Monterey Formation. Small amounts of oil and gas were observed in several wells, but commercial production was never established. Oil from the Peck well in Los Gatos is highly biodegraded, contains biomarkers commonly found in oils derived from the Monterey Formation, and has a stable-C-isotopic (d13C) composition of –23.32 permil, indicating derivation from a Miocene Monterey Formation source rock. Preliminary calculations suggest that about 1 billion barrels of oil may have been generated from source rocks within the Monterey Formation in the deepest part of the subsurface sedimentary basin between Los Gatos and Cupertino. Most of this oil was probably lost to biodegradation, oxidation, and leakage to the surface, but some oil may have accumulated in as-yet-undiscovered structural and stratigraphic traps along the complex structural boundary between the Santa Clara Valley and the Santa Cruz Mountains. Although some of these undiscovered accumulations of oil may be of commercial size, future petroleum exploration is unlikely because most of the area is currently devoted to residential, recreational, commercial, and industrial uses.