Alaska Oil & Gas Development Company
Years before Alaska became a state, petroleum exploration companies drilled expensive dry holes. The Alaska Oil & Gas Development Company was among them.
The Alaska territory’s first commercial oil well arrived in 1957, two years before statehood. The discovery well, drilled by the Richfield Oil Company – today known as ARCO – successfully drilled at Swanson River on the Kenai Peninsula. The first well, which produced 900 barrels of oil a day from 11,215 feet, revealed an oilfield.
Beginning in the 1950s, many Alaskans had tried their hand at wildcatting, notes one historian.
Among those searching for petroleum riches, Alaska Oil & Gas Development accepted the risks and financial challenges of exploring unproven territory. William A. O’Neill and a former oilfield roughneck incorporated the company on October 31, 1952.
“Bill O’Neill, a local mining engineer and University of Alaska regent, and partner C.F. ‘Tiny’ Shield, a giant of a man, believed they could find oil in the Copper River Basin,” explains Jack Roderick in his 1997 book, Crude Dreams: A Personal History of Oil & Politics in Alaska.
“Before coming to Alaska in the early 1920s, Shield had been a cable-rig ‘tool pusher’ in Montana, Texas and California,” he adds.
Within a year, Alaska Oil & Gas Development began drilling near “mud volcanoes” – sulfuric residues bubbling up from the valley floor – and near mud cliffs embedded with giant marine fossils, Roderick reports.
Far from any oil or natural gas producing well in North America, the well site – known as a “rank wildcat” – was at Eureka Roadhouse, about 125 miles northeast of Anchorage, just 200 feet off the Glenn Highway (part of Alaska Route 1).
Alaska Oil & Gas Development Company offered 300,000 shares of stock at $1 per share, advertising in newspapers:
The money realized from the sale of this stock is being used to purchase equipment and finance operations for oil exploration in the Eureka-Nelchina location. The location of the first exploratory drill hole has been chosen by our consulting geologist after a geological survey of the area.
Drilling at the Eureka Roadhouse site began on September 20, 1953, using a Walker-Neer Manufacturing Company cable-tool spudder.
“By early 1954, the Eureka No. 1 well had been drilled down more than half a mile, but the antiquated equipment, making each day’s going tougher, eventually forced O’Neill and Shield to shut down the operation,” explains Roderick.
The limitations of outdated cable-tool technology – and the onset of Alaska’s winter – delayed but did not deter the men.”Shield traveled to Texas, and while looking up some tool pusher buddies, contacted Fort Worth independent James H. Snowden,” says Roderick.
Snowden sent a geologist to Alaska to investigate the well. “He reported that by converting the cable-tool rug to a rotary, the Eureka well could be deepened to 5,500 feet,” Roderick notes.
By the summer of 1954, having switched the Walker-Neer spudder for a rotary rig, the Eureka No. 1 well reached about a mile in depth – but found no trace of oil. O’Neill and Shield tried again, drilling a second well near Houston, Alaska, on the Alaska Railroad line. It ended as a dry hole as well.
According to Roderick, Alaska Oil & Gas Development plugged and abandoned both wells by 1957 – the year Richfield Oil Company struck the territory’s first commercial oil well at Swanson River on the Kenai Peninsula.
With its funds exhausted, the Alaska Oil & Gas Development Company failed to file a required report and was “involuntarily dissolved” by regulators.
Discovery of the Prudhoe Bay field on Alaska’s North Slope in 1968 made the 49th state a world-class oil and natural gas producer.
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