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Cable Tool RigsFauvelle was assisted by Beart in drilling the 1845 well, which was a hand rotated percussion operation.  They pumped water through the well to remove the cuttings.  The paper Fauvelle wrote for the Franklin Institute of Philadelphia in 1846, made no mention of "mud."  Several US patents from the 1860s to the 80s mention the use of water in rotary drilling to remove cuttings.  M.T. Chapman received a patent on circulating water and then to "recirculate the water which contained clay particles generated during drilling." (Brantly 1971)

Brantly cited a personal letter he received from Carl A. Young (Secretary of the API Division of Production and the author of a brief history of drilling) stating:

"About 1889 Mr. B. Andrews, Sr. of New Orleans, LA. was engaged in drilling water wells by contract using the rotary system and soon discovered that thick clastic mud thoroughly mixed would wall up a hole being drilled and in artesian well drilling particularly, in which he was then engaged, the hole could be finished with one string of pipe and the casing set after the hole was drilled." 

Drilling with diamond core barrels
Rodolphe Leschot, a French Mining Engineer, invented the diamond core drill for drilling shot holes.  According to the patent ( July 14, 1863 US Patent 38235), his device included a small water pump to remove the rock cuttings and dust, as well as to cool the core barrel. The fluid used was water. Development of these devices continued throughout the late 1800s that were capable of drilling to around 6000 feet.  Most of this drilling was in mining operations, not for oil. 
 
Texas/Louisianna Gulf Coast Drilling

Many wells were drilled by the rotary method in the coastal plans of Texas and Louisiana in the 1890s. About 500 in the Corsicana area alone. These wells were drilled through the Taylor Marl a blue, soft, clastic shale or laminated clastic clay. The expression in the field was, it "made good mud." 

From Brantly: "All intelligent drillers were familiar with mud laden fluids. or drilling mud as commonly called. They had no knowledge of the mechanics or physical characteristics of drilling mud from a scientific or technical standpoint, but they knew fairly well what it would do in the hole. They also knew that it could get too heavy or too thick in a well being drilled and had to be thinned with clear water. They also knew that it could get too thin or light in weight in the hole and had to be "conditioned" by adding clastic clays or thick mud mixed at the surface."

So, no one invented drilling mud. It was a natural consequence of drilling through "mud making" shales. The use of mud-laden fluids for drilling was well established prior to Spindletop.  But, there is no documentation that mud-laden fluids were deliberately mixed for use in oil well drilling until Spindletop.
 
The terminology for " drilled solids" likely changed from the cable tool "drillings" to the rotary terminology "cuttings" in the late 1800s.  Water well drillers did not usually work with mud, but used clear water to sweep the cuttings out of the wellbore.  The cuttings were then discarded and clear water pumped back down the hole. 

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