Continental Oil and Refining Company incorporated in Delaware in February 1919; by May its stock was advertised in the Brooklyn Daily Eagle, offering shares for $1.50 each with projected earnings of “approximately $1,000,000 annually on present production.”
With potential investors admonished to “buy before increase in price,” the company advertised in trade publications like Oil and Gas News, established in 1916 in Kansas City, Missouri, and published every Thursday (a 52-week subscription was $4). The first of several Continental Oil and Refining full-page advertisements appeared in the August 18, 1919, issue.
“This entire page has been purchased for one year by Houston, Haverbeck & Company, Inc., Securities Underwriters, New York City,” proclaimed the ad, which noted the underwriters “would advise those interested in the drilling and development program of the Continental Oil & Refining Co. to watch this space.”
By January 1920, the new company’s stock shares sold for as much as $2.50 each – but editors at another trade magazine expressed concern, declaring, “Although the company appears to have some experienced men in its management, there are two features which do not appeal strongly to us.”
United States Investor editors reported that Continental Oil and Refining was incorporated in February 1919, but “could not have started operations until some time later, yet on May 15 the company started to pay monthly dividends of 1.5 percent, and on November 15 this was increased to 2 per cent, or at the rate of 24 per cent per year.”
Further, the publication accused the company of “making no provision (for) any contingency , but is declaring dividends as fast as any profits are obtained.” The editors concluded, “We feel that you would find a more satisfactory speculation in oil stocks in the shares of companies that have a longer record of successful operation.”
According to the International Petroleum Register, Continental Oil & Refining owned eight producing wells and “is interested in lease acreages, thru stock ownership in the Borealis Oil Producing Company, Wichita, Kan., in the following fields: Butler County, Kan.; Chautauqua County, Kan., Osage County, Okla., and Homer, La.”
United States Investor also reported in August 1920 that “Continental Oil & Refining Company now has production of about 250 barrels daily. It is paying dividends at the rate of 24 percent yearly. The authorized capital stock of the company is $10,000,000 all common, par value $1. Recent quotations for the stock cover a very wide range from about 65 cents to $1.25. This indicates the speculative aspect of the shares and future developments must be awaited in order to determine whether or not the company is likely to become a steady earnings and producing oil company.”
The Directory of Obsolete Securities (originally published from 1927 to 1969) reported Continental Oil & Refining Company’s demise as “no longer in existence having become inoperative and void for non-payment of taxes March 22, 1922.” Share owners were left with worthless paper.
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The stories of exploration and production companies joining petroleum booms (and avoiding 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 bawells@aoghs.org. © 2018 Bruce A. Wells.
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