Kansas and Oklahoma Cities Service subsidiaries discover giant Mid-Continent oilfields.

 

Cities Service Company was established in September 1910 by Henry Latham Doherty as a public utility holding company in Bartlesville, Oklahoma, home of the first commercial Oklahoma oil well. Five years after its founding, Doherty’s company would make its own historic discoveries.

Doherty began by selectively purchasing natural gas producing properties in Kansas and Oklahoma. He acquired distributing companies and linked them to his natural gas supplies. Cities Service Company derived income from the subsidiary corporations’ stock dividends. One natural gas subsidiary drilled exploratory wells in central Kansas.

Cities Service stock certificate.

Occidental Petroleum acquired Cities Service Company in 1982. Stock certificates have only collectible value.

On October 5, 1915, Cities Service’s Wichita Natural Gas Company discovered the 34-square-mile El Dorado oilfield. As oil and natural gas holdings expanded in the Mid-Continent, the company added the Empire Gas & Fuel Company of Bartlesville, Oklahoma.

In 1928, Empire Oil & Refining, the Cities Service subsidiary, discovered the giant Oklahoma City oilfield. Production also came from the Greater Seminole oilfield, discovered earlier near Seminole. Drilled in July 1926, the Fixico No. 1 well revealed the prolific Wilcox sands at 4,073 feet and launched a drilling boom rivaling those in Texas. Learn more in Greater Seminole Oil Boom.

Over the next decade more than 60 petroleum reservoirs were found in 1,300 square miles of east-central Oklahoma – and seven were “giants,” producing more than million barrels of oil each.

A March 1930 a well hit a high-pressure formation about 6,500 feet beneath the state capital, Oklahoma City. A geyser of oil erupted — and flowed skyward for 11 days. The Oklahoma City oilfield discovery well soon became an international sensation. Learn more in World Famous Wild Mary Sudik.

Cities Service gas station circa 1965.

Jack & Al’s Cities Service Station in Key West, Florida, in 1965. Photo courtesy Monroe County Public Library, Key West.

Federal court mandates in 1940 (a result of the Public Utility Holding Company Act of 1935) resulted in Cities Service Company’s divestiture of its public utilities. In 1959 the remaining oil and natural gas companies were reformed as Cities Service Oil Company. In 1964, Cities Service changed its marketing brand by introducing the name CITGO — keeping the first syllable of its name and ending with GO to imply power, notes the company CITGO website.

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When T. Boone Pickens’ Mesa Petroleum tried a hostile takeover, Cities Service resisted and counter-offered. Gulf Oil Company made a “White Knight” merger offer, but 20 years of litigation ensued. Occidental Petroleum ultimately acquired Cities Service on December 3, 1982.

Under the terms of the purchase merger agreement, Cities Service stockholders were entitled to exchange each Cities Service share for .41 of a share of $15.50 cumulative preferred stock of Occidental and the right to receive one or more zero coupon notes.

CITGO petroleum company logo

Petróleos de Venezuela has owned CITGO since 1990.

A year later, Occidental sold the entire Refining, Marketing and Transportation Division of Cities Service to Sounthland as well as the CITGO brand to Southland Corporation, owner of 7-Eleven stores. In 1986 Petróleos de Venezuela, the national oil company of the Bolivarian Republic of Venezuela, purchased 50 percent of CITGO. The remainder of the company, based in Houston, was acquired by Petróleos de Venezuela in 1990.

Cities Service stock certificates that are perforated or otherwise cancelled have only collectible value. Others have been canceled on the books and the underlying value turned over to state unclaimed property divisions.

The Butler County Historical Center and Kansas Oil Museum in El Dorado have artifacts from the first “scientifically discovered” oil wells, which drew new petroleum geologists who were learning about anticlines and traps and ancient sea beds (learn more in Kansas Oil Boom).

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Recommended Reading: The fire in the rock: A history of the oil and gas industry in Kansas, 1855-1976 (1976); The Oklahoma City Oil Field in Pictures (2005). Your Amazon purchase benefits the American Oil & Gas Historical Society. As an Amazon Associate, AOGHS earns a commission from qualifying purchases.

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The American Oil & Gas Historical Society preserves U.S. petroleum history. Join today as an annual AOGHS supporting member. Help maintain this energy education website and expand historical research. For more information, contact bawells@aoghs.org. Copyright © 2021 Bruce A. Wells. All rights reserved.

Citation Information – Article Title: “Cities Service Company.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/stocks/cities-service-company. Last Updated: August 29, 2021. Original Published Date: April 29, 2013.

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