Southern Rose Oil & Gas Company incorporated on April 17, 1920, in Arkansas. By the end of June 1921, the company had secured a 25-acre site to build a refinery near El Dorado.
The company planned on using the “Edwards System of Refining Petroleum” reportedly perfected by Dr. E.A. Edwards, who had been termed the dean of refiners.
Southern Rose Oil & Gas then looked to Texas’ Mexia oilfield to drill its own oil wells to supply its refinery. The Mexia field in northwestern Limestone County, Texas, later introduced the concept of fault-line production in the Woodbine sands, notes the Handbook of Texas Online.
The Mexia field had begun producing oil moderately in 1920, but in August 1921, Western Oil Corporation’s Desenberg No. 1 well blew in at 18,000 barrels of oil a day, followed by the Adamson No. 1 well with 24,000 barrels of oil a day.
City historians later noted, “Little wonder that all roads led to Mexia and that they were jammed.”
The United States Investor of October 1, 1921, noted a variety of offers proposing Southern Rose Oil & Gas share owners exchange their stock for shares of Manhattan-Texas Petroleum Company, Manhattan Consolidated Petroleum Company, and/or Desdemona Oil & Refining Company.
Although such consolidations were not an uncommon effort to save under-capitalized ventures, investors had to be wary. “Neither the company itself or those companies, for the stock of which its stock is to be exchanged, have been receiving dividends,” noted U.S. Investor editors. “We are not favorably impressed with any of them as a medium of profit or investment either.”
On August 18, 1922, another company discovered oil in Mexia’s Kosse district (Jones No. 1 well). By November, Southern Rose Oil & Gas had a derrick of its own up with hopes to exploit the find.
The Jones No. 1 well however, “never fulfilled its initial promise and is still a text-book example of a one-well field,” according to the Handbook of Texas Online.
Southern Rose Oil & Gas Company’s well, the W.D. Allen No. 1, never progressed beyond construction of its derrick. To investors’ dismay, mounting debt ensured the demise of Southern Rose and loss of their investment. In May 1923, company assets were auctioned at an Eastland County, Texas, sheriff’s sale. Debt amounted to more than $24,500 ($342,000 in 2016 dollars) of which about half was recovered.
The first Arkansas oil gusher, the Busey-Armstrong No. 1 well, blew in on January 10, 1921, near El Dorado and launched the Arkansas petroleum industry. By 1925 the 68-square-mile field led U.S. oil output – with production reaching 70 million barrels.
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 email@example.com. © 2018 Bruce A. Wells.