Henry H. Hoffman formed several petroleum companies and split his time between New York City and Houston.
With interests in both oil exploration and refining, he had early hopes of finding his fortune at the Goose Creek oilfield 21 miles southeast of Houston.
Goose Creek had produced only dry holes and marginal oil wells prior to a gusher in August 1916 (it also was where Howard Hughes Sr. secretly tested a prototype two-coned bit in 1909). The discovery well initially produced 8,000 barrels daily, indicating Goose Creek was a large oilfield. Houston drilling companies rushed to the area to bid for leases, build derricks and drill wells.
However, in October 1916, Hoffman withdrew from his interests in the Goose Creek and nearby Humble oilfields and organized two new companies.
Hoffman Oil & Refining Corporation was formed to acquire and operate refineries. This company incorporated in November 1916 with Hoffman as president and was offered at $10 per share.
Hoffman began running newspaper advertisements that capitalized on Americans’ growing patriotism as World War I raged in Europe.
Noting the importance of investing in U.S. refineries to “Help Uncle Sam’s Big Navy,” one ad claimed there were profits to be made from Hoffman Oil & Refining: “Yes, wealthy Chicago people and elsewhere are buying this Refinery stock up fast. Don’t delay. Get in while you can.”
Hoffman also formed the Hoffman Oil Company, capitalized a $4 million and focused on exploration and production. The two companies shared the same officers. He then purchased “moving picture machines” for a traveling promotion concept.
After acquiring 12 projectors, Hoffman ordered 24 reels of original oilfield scenes to market a stock selling campaign in a number of the larger cities. His plan included renting a room at each location and giving a free show. His oil company stock was then offered for sale.
Hoffman’s motion picture sales presentations apparently were more successful than his attempts to find, recover, and refine oil. In Ohio, he was indicted by a grand jury “for advertising securities for sale in that state without obtaining a license.”
In August of 1918, Hoffman Oil & Refining acquired Buffalo Oil & Refining with the understanding that Buffalo shareholders were to receive 10 shares of Hoffman stock for one of their shares. There were few benefits.
Although Hoffman’s company once again held properties in the Goose Creek oilfield – as well as leases in the “Roaring Ranger” oilfield and the Burkburnett oilfield – the company’s fortunes continued to fade. Read more about these internationally famous North Texas discoveries in Pump Jack Capital of Texas.
By July 1919, Hoffman Oil & Refining had lost its charter to do business in Texas.
“We do not assume to pass upon the merits of the particular stock offered by Henry H. Hoffman as an individual or through the Hoffman Oil Company,” declared a January 1920 article in Trust Companies magazine about his exploration company.
“But it is a horse of another color when Hoffman uses letter heads bearing the imprint ‘Union Trust Company,’ and in small type underneath the word ‘incorporated’ as bait to secure investors throughout the county,” the magazine concluded.
In March of 1920, the Oil Trade Journal announced that Turnbow Oil Corporation was being organized to take control of the failed Hoffman Oil & Refining. Hoffman was listed as Turnbow Oil vice president.
The takeover, which also absorbed the Interstate Oil & Refining Company of Texas, included Hoffman’s eight-story office building in Houston and a 1,000-barrel-a-day refinery on the Houston Ship Channel.
Desperation behind the Turnbow Oil deal was revealed in a November 1920 United States Investor report that noted the value of Hoffman Oil & Refining stock:
The fact that recent quotations on Hoffman Oil & Refining are from one and one-half to three cents per share gives rather conclusive evidence as the sharp decline in value of the stock. This would be placing a value of $15,000 to $30,000 on the assets of this corporation which originally attempted to float $10,000,000 of stock. Of course, nothing like the entire capital was ever issued and consequently the market value is even smaller than the above figures indicate.
Turnbow Oil – and all of the Henry H. Hoffman’s petroleum corporations – failed to survive. Ross S. Sterling, founder and president of Humble Oil Company (now ExxonMobil) constructed a highly successful major refinery at Goose Creek oilfield in 1921.
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 firstname.lastname@example.org. © 2018 Bruce A. Wells.