In the early 1950s, Alaska Oil & Gas Development Company offered 300,000 shares of stock at $1 per share, advertising in newspapers.
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. Another company also had tried to find oil in the Matanuska Valley, but failed before it could drill even one well (see Chickaloon Oil Company).
With its funds exhausted, the Alaska Oil & Gas Development Company failed to file a required report and was “involuntarily dissolved” by regulators.
Although the first Alaska Territory commercial oil well came in 1902, in July 1957, Richfield Oil Corporation made a major discovery two years before Alaska statehood. The company struck the territory’s first commercial oil well at Swanson River on the Kenai Peninsula.
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.
Prudhoe Bay, the largest oilfield in North America, in turn inspired the U.S. petroleum industry’s 1977 engineering marvel, the Trans-Alaska Pipeline.
The stories of many exploration companies trying to join petroleum booms (and avoid busts) can be found in an updated series of research in Is my Old Oil Stock worth Anything?
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