Fake New Jersey Oil Well
There would be no East Coast oil boom, despite enthusiastic promotions of a fake New Jersey oil well after a family in Millville decided to expand from real estate into oil exploration business on their farm in Cumberland County.
As early as August 1916, a West Coast newspaper covered the unusual attempt to find oil East Coast oil. “Lewis Steelman, the man who has been prospecting for oil near Millville, N.J., for some time, has begun active work to locate an oil well and he confidently expects to strike the fluid,” reported California’s Santa Ana Register.
Steelman Realty Gas & Oil Company
“Steelman has secured options on the property in the vicinity of his estate at Cumberland, near here, and has erected a derrick 75 feet high, by which the drilling will be done,” the newspaper explained.
Steelman Realty Gas & Oil Company officially incorporated on November 13, 1916, with $300,000 in capital. Most of the company’s stock was sold to Pittsburgh independent producers. Officers included Lewis Steelman, Merton Steelman and Leroy Steelman. Their objective was to “drill for natural gas and oil on lands of the company.”
When a Steelman exploratory well reportedly discovered oil 800 feet deep on a 1,500-acre tract, the Petroleum Gazette in Titusville, Pennsylvania, took note of the discovery. “Lewis Steelman struck oil on his estate four miles east of Millville in the depths of a big forest. Experts who were here several months ago assured Steelman that there was oil on the property and he built a derrick and today struck a deposit which it is believed will yield 25 barrels of crude oil daily.”
The Petroleum Gazette (published where the first U.S. oil well had been drilled in 1859) added that Steelman was not satisfied with the oil strike and would “go a few feet lower to protect himself from prospectors who might drain his well.”
Geologic Predictions of Dr. von Hagen
With Steelman Realty Gas & Oil said to be buying hundreds of acres of forest land surrounding Steelman property, company stock sales were buttressed by the declarations of geologist Dr. H.J. von Hagen, cited as “one of the world’s greatest living geologists and petroleum engineers.”
Covering news of the New Jersey wildcat well from North Carolina, the Durham Morning Herald reported Dr. von Hagen as one of the men who had struck oil at Millville. The newspaper quoted the geologist as saying the petroleum came from “a great belt which starts near Moncton, New Brunswick, reappears at the eastern end of Long Island, runs near Lakewood, N.J.”
Dr. von Hagen also predicted this previously unknown geologic oil-bearing formation extended into Maryland and West Virginia, varied in width, “but is nowhere more than fifteen miles across.” Dr. von Hagen had spent two years in tracing it, the newspaper added.
“Dr. von Hagen says he and his associates have received a $100,000 offer for the well which they are sinking, and from which they can get about fifteen barrels of oil a day, though the final depth has not been reached,” reported the Morning Herald. Dr. Von Hagan himself leased thousands of acres of land east of Millville, as well as nearby Hammonton.
It looked like the beginning of New Jersey’s first commercial oil production. Then Bridgewater’s Courier-News reported startling news. “Dr. von Hagen and His Bag Gone,” the account began. “Residents of this city, Millville and other places in this section are puzzled over Dr. von Hagen and his oil locating scheme. The doctor is away, his offices here are unoccupied at the present, no oil has been struck, and no one has been asked to buy stock.”
The Courier-News also had something to say about the geologist and his unusual methods. “The story about the doctor sinking his wells for wireless communication with Germany is all rot. He claims to have discovered the secret of locating oil under ground. He has a little bag with a golden cord attached. When that Is held over ground where there is oil the bag becomes agitated and swings violently.”
Meanwhile, another account of the well from the Oil, Paint and Drug Reporter said the discovery had “brought considerable notoriety to a locality in which geologic conditions, as promptly announced by the State geologist, are unfavorable to the occurrence of oil in commercial quantities…No instance of oil seepage and no oil-bearing shales have ever been observed by any worker on the State Geological Survey.”
The publication added that the survey had been “continuously active since 1864” and the geology of New Jersey had been studied “to a more minute degree than that of any other State, the conclusion seems irresistible that they (oil-bearing formations) do not occur.”
No New Jersey Oil Boom
Articles describing a successful oil well in New Jersey nonetheless excited investors and apparently attracted more drillers and cable-tool rigs. “Discovery of Flow Near Millville, N.J., Starts Rush of Prospectors,” proclaimed the Gettysburg (Pennsylvania) Times. “The Steelman Realty, Gas and Oil Company, which recently struck oil at their well on the 1,500 [acre] tract three miles east of Millville, has received pipe for a second well which will be started at once.”
The newspaper said pipe and drills had arrived “for three independent concerns, and prospectors from Oklahoma and elsewhere will sink the wells on leased ground near the location of the well where oil has been struck.”
However, the state geologist remained dubious. “All drilling for oil here is extremely speculative and should be undertaken only by those who fully understand the hazards of the game and can afford to lose their entire venture,” he warned. “The public should therefore beware of stock-selling schemes based on reported discoveries or assumed occurrences of oil in New Jersey.”
An October 1917 report on the well’s status noted technical problems. “For months no work was done at the well owing to the loss of tools and obstruction of the casing (see Fishing in Petroleum Wells).” Despite this trouble, “the sale of stock in an oil and realty company controlling adjoining territory was actively pushed by some of the persons interested in the company which sank the well.”
15 Minutes of Fake New Jersey Oil Well Fame
Perhaps the New Jersey State Geologist had the last word about the well when:
“Facts have come to his knowledge which verify what he formerly suspected, namely, that the reputed discovery at Millville was a fake pure and simple, although not all of the persons interested in drilling the well had knowledge of the fraud.”
Steelman Realty, Gas and Oil Company stock certificates today are valued by collectors as remnants of a failed petroleum speculation scheme. “New Jersey Not a Good Field for Oil Investments,” concluded the April 1921 Oil Trade Journal.
For a thoroughly researched chronology of the Steelman well, visit the Millville Historical Society and see Paul M. McConnell’s “A Century Ago, Southern New Jersey Had Its Fifteen Minutes of Fame.”
Home to major East Coast refineries, New Jersey has never produced commercial quantities of oil or natural gas.
The American Oil & Gas Historical Society thanks long-time Millville resident George R. Martin, who trekked the countryside to find the Steelman well in 2017. “”My father and my uncle took me to see it many years ago,” he recalled. “The old timers called the woods road leading to the site Oil Well Road.”
Adding to the well’s long-forgotten story, Martin said he contacted a friend who lives in the area. The friend, who helped him find the site, said the well’s owners once collected “crankcase oil from the local garages and dumped it down the well and then claimed they struck oil!”
The stories of exploration and production companies trying to join petroleum booms (and avoid busts) can be found updated in Is my Old Oil Stock worth Anything? The American Oil & Gas Historical Society preserves U.S. petroleum history. Please support this AOGHS.ORG energy education website. For membership information, contact firstname.lastname@example.org. © 2018 Bruce A. Wells.