by Bruce Wells | Jan 2, 2025 | Petroleum Companies
Three petroleum exploration companies risked everything on one well in their gamble to to find an Oregon oilfield.
The lure of petroleum wealth invited speculators practically since the first U.S. oil well of 1859 in Pennsylvania. Exploratory wells especially have remained a high-risk investment since almost nine out of ten of these “wildcat” wells fail to produce commercial amounts of oil.
The Morrow No. 1 well, an ill-fated wildcat well first drilled in 1952 in Jefferson County, Oregon. Photo courtesy Oregon Department of Geology and Mineral Industries, “The Ore Bin,” Vol. 32, No.1, January 1970.
With under-capitalized operations turning to public sales of stock to raise money, many small ventures have been forced to bet everything on drilling a first successful well to have a chance at a second. Drilling a producing well can bring some wealth, but a “dry hole” brings bankruptcy.
And so it was in the 1950s on a remote hillside in Jefferson County, Oregon, where three companies searched for riches from the same well.
Northwestern Oils Inc.
The first of these three Oregon wildcatters, Northwestern Oils, incorporated in 1951 with $1 million capitalization in order to “carry on business of mining and drilling for oil.”
With offices in Reno, Nevada, in early 1952 Northwestern Oils began drilling a test well about eight miles southeast of Madras, Oregon. Using a cable-tool drilling rig (see Making Hole – Drilling Technology), drillers reached a depth of 3,300 feet on the Baycreek anticline before work was suspended because of “lost circulation troubles.”
Circulation troubles continued with the Morrow No. 1 well – also known as the Morrow Ranch well – in Jefferson County (Section 18, Township 12 South, range 15 East). By March 1956, with no money and no additional drilling possible, Northwestern Oils’ assets were “seized for non-payment of delinquent internal revenue taxes due from the corporation” and auctioned off at the Jefferson County courthouse.
Central Oils Inc.
Central Oils (Seattle) also was formed in 1956. With plans to join the other rare Oregon wildcatters, the company registered with the Security and Exchange Commission on July 30, 1958. It sought to sell one million shares of stock to the public at 10 cents a share. Proceeds would finance leasing and drilling, just like Northwestern Oils.
Central Oils received a permit to deepen Northwestern Oils’ old Morrow Ranch well in 1966 and planned to continue drilling with a cable-tool rig. Nothing happened.
“Commencement of this venture has been delayed until the spring of 1967,” one newspaper reported. But Central Oils had run afoul of the SEC. Oregon regulators recorded the well abandoned as of September 12, 1967, and Central Oils “out of business; no assets.”
Robert F. Harrison
In May 1968, Robert F. Harrison and his associates took over the same well — this time with plans to deepen it to more than 5,000 feet. But two years later the drilling effort was still stuck at a depth of 3,300 feet. Desperate, Harrison tried to clear the borehole by applying technologies for Fishing in Petroleum Wells.
On February 2, 1971, an intra-office report noted that R.F. Harrison “will abandon as soon as weather permits,” never having exceeded the original Northwestern Oils total depth of 3,300 feet. It would be a dry hole.
Harrison finally plugged and abandoned the Morrow No. 1 well as of October 12, 1971. Oregon’s Department of Geology and Mineral Industries has identified the stubborn nonproducer as well number 36-031-00003. There has never been a successful oil well drilled in Oregon.
America’s first dry hole was drilled in 1859 by John Grandin of Pennsylvania – near and just a few days after the first commercial discovery. In 2014, U.S. oil wells produced more than 8.7 million barrels of oil every day, according to the Energy Information Administration.
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?
______________________
Recommended Reading: Oil on the Brain: Petroleum’s Long, Strange Trip to Your Tank
(2008);The Greatest Gamblers: The Epic of American Oil Exploration
(1979).
Your Amazon purchase benefits the American Oil & Gas Historical Society. As an Amazon Associate, AOGHS earns a commission from qualifying purchases.
_______________________
The American Oil & Gas Historical Society (AOGHS) preserves U.S. petroleum history. Become an annual AOGHS supporter and help maintain this energy education website and expand historical research. For more information, contact bawells@aoghs.org. Copyright © 2025 Bruce A. Wells. All rights reserved.
Citation Information – Article Title: “Oregon Wildcatters.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/old-oil-stocks/oregon-wildcatters. Last Updated: February 26, 2025. Original Published Date: January 29, 2016.
by Bruce Wells | Feb 1, 2024 | Petroleum Companies
An experienced independent oil producer, W.D. Richardson orchestrated the merger of his own company, Lake Park Refining (incorporated 1918), with Dunn Petroleum and Davenport Petroleum to form Meridian Petroleum Company in September 1920.
Merger terms dictated one share of Dunn Petroleum for two shares Meridian Petroleum; one share of Lake Park Refining for two shares Meridian Petroleum; and one share of Davenport Petroleum Co. for 20 shares Meridian Petroleum.
The combined organization held assets valued at about $13 million, including refineries in Oklahoma: Okmulgee (3,500 barrel), Ponca City (2,500 barrel), and Hominy (1,500 barrel). There also were producing wells in Oklahoma, Kansas and Texas, as well as “promising acreage” in Wyoming.
With offices in Kansas City, Missouri, Delaware-chartered Meridian Petroleum was capitalized at $25 million. By the end of 1920, the new company reported a net profit of $1,076,828. At the company’s annual meeting in April 1921, at least 3,000 Meridian Petroleum stockholders re-elected W.D. Richardson and the company’s officers.
“Rarely have stockholders made so plain their confidence in the management of an oil company,” noted The Oil & Gas News reported. At the same meeting, stockholders approved the issue of $2.5 million dollars in “first mortgage bonds to be used in retiring present outstanding indebtedness and to give the company additional working capital.”
Trade publications carried advertisements for Meridian Petroleum products such as “No. 1100 Straight Run Auto Oil” and “No. 22-600 S. R. Cylinder Stock (Light Green).” These and other lubricants were promoted with the Meridian motto, “The Line that Circles the World.”
But all was not well. The Oklahoma refineries depended upon crude oil deliveries, which were declining. Throughout 1921, only one of Meridian’s Petroleum’s three refineries operated at all, and it at half capacity.
The first official Oklahoma oil well was completed in 1897 at Bartlesville. Photo by Bruce Wells.
Oil production from Meridian Petroleum’s own leases proved insufficient, although in July 1921, Oildom reported a hopeful development.
“The company’s big well in the Hominy district of Osage county, Oklahoma, which came in at 10,000 barrels and ceased flowing after several days, due to a caved hole, was put in commission again and was reported making 3,000 barrels natural (flow),” the publication noted.
A report in the American Investor valued the company’s stock at about 13 cents a share on the New York Curb Market in December 1921, down from a high of 22 cents a share for the year and far less than the original offering at $2 per share.
On April 1, 1922, Meridian Petroleum defaulted on a $100,000 debt and in June, U.S. District Court appointed a receiver as the $2.5 million mortgage approved by stockholders a year earlier went into foreclosure. The company also carried unsecured debt of $600,000 and never paid a dividend.
Despite predictions of a reorganization, by 1927 Meridian Petroleum was gone for good. W.D. Richardson quickly went on to form the Richardson Refining Company, capitalized at $250,000 in November 1922.
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 Library of Congress offers further research help at Business History: A Resource Guide.
_______________________
Recommended Reading: The Prize: The Epic Quest for Oil, Money & Power (1991). Your Amazon purchase benefits the American Oil & Gas Historical Society. As an Amazon Associate, AOGHS earns a commission from qualifying purchases.
_______________________
The American Oil & Gas Historical Society (AOGHS) preserves U.S. petroleum history. Become an AOGHS annual supporting member and help maintain this energy education website and expand historical research. For more information, contact bawells@aoghs.org. Copyright © 2024 Bruce A. Wells. All rights reserved.
Citation Information – Article Title: “Meridian Petroleum Company.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/old-oil-stocks/meridian-petroleum-company. Last Updated: February 14, 2024. Original Published Date: January 29, 2016.
by Bruce Wells | Jun 21, 2023 | AOGHS Newsletter, Energy Education Resources
by Bruce Wells | Sep 29, 2022 | Petroleum Companies
Elk Basin United Oil Company incorporated in 1917 seeking oil riches in Wyoming’s booming Elk Basin oilfield. Oilfields found in North Texas, including a 1911 gusher at Electra, already had resulted in a rush of new exploration ventures – and created boom towns like Burkburnett.
Wherever found, America’s newly discovered oilfields led to the founding of many exploration ventures that competed against more established companies.
Newly formed companies frequently struggled to survive as competition for financing, leases, and drilling equipment intensified, especially as exploration moved westward.
Wyoming Oilfields
In a remote, scenic valley on the border of Wyoming and Montana, a discovery well opened Wyoming’s Elk Basin oilfield on October 8, 1915. Wyoming’s earliest oil wells had produced quality, easily refined oil as early as 1890.
Drilled by the Midwest Refining Company, the wildcat well produced up to 150 barrels of oil a day of a high-grade, “light oil.” Credit for oil discovery is given to geologist George Ketchum, who first recognized the Elk Basin as a likely source of oil.
“Gusher coming in, south rim of the Elk Basin Field, 1917.” Photo courtesy American Heritage Center.Ketchum, a farmer from Cowly, Wyoming, in 1906 had explored the area with C.A. Fisher, who had been the first geologist to map a region within the Bighorn Basin southeast of Cody, Wyoming, where oil seeps were discovered in 1883.
The Elk Basin, which extends from Carbon County, Montana, into northeastern Park County, Wyoming, attracted further exploration after the 1915 well. More successful wells followed.
Once again, petroleum discoveries in unproved territory attracted speculators, investors, and new companies – including the Elk Basin United Oil Company.
Established petroleum companies like Midwest Refining — and the Ohio Oil Company, which would become Marathon Oil — came to the Elk Basin. These oil companies had the financial resources to survive a run of dry holes or other exploration hazards.
The exploration industry’s many smaller and under-capitalized companies would prove especially vulnerable.
Audacious advertising claims helped Elk Basin United Oil Company compete for investors.
Is My Old Oil Stock Worth Anything features several such small players in Wyoming’s petroleum history, including the notorious Dr. Frederick Albert Cook (Arctic Explorer turns Oil Promoter). Even Wyoming’s famous showman, Col. William F. Cody, got caught up in the state’s oil fever (Buffalo Bill Shoshone Oil Company).
Elk Basin United Oil Company
Elk Basin United Oil Company of Salt Lake City, Utah, incorporated on July 30, 1917, and acquired a lease of 120 acres in Wyoming’s Elk Basin oilfield. By February 1918, company stock sold for 12 cents a share.
Enthusiastic newspaper ads promoted its “6 properties in 3 different fields…A 6 to 1 shot!” Twenty producing wells were reputed to be within one mile of Elk Basin United Oil’s Wyoming well site.
Meanwhile, Elk Basin United Oil reported expansion plans underway in a growing Kansas Mid-Continent oilfield. The company secured leases near Garnett and completed four producing oil wells, yielding a total of about 500 barrels of oil a month. It added an additional 112 acres and planned a fifth well.
Prairie Pipe Line Company (later Sinclair Consolidated) completed pipelines into the Garnett field through which several companies looked to transport their oil production.
However, growing competition from better funded exploration ventures and low crude oil prices ranging between $1.10 and $1.98 per barrel of oil in 1917 and 1918 drove many small companies into consolidations, mergers or bankruptcy.
Elk Basin United Oil, exploring back in Wyoming by March 1919, sought a lease on the property of the First Ward Pasture Company bordering the Utah line, “with a view of prospecting the property declare the surface showing to be very favorable for an oil deposit.” But financial issues continued to burden the company.
In December 1919, Oil Distribution News reported Basin United Oil Company was negotiating mergers with the Anderson Oil Company and the Kansas-United Oil Company, with a proposed capitalization of $1 million. With no results of the planned combination documented, Elk Basin United Oil Company disappeared from financial records soon thereafter.
_______________________
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? Become an AOGHS annual supporting member and help maintain this energy education website and expand historical research. For more information, contact bawells@aoghs.org. Copyright © 2022 Bruce A. Wells. All rights reserved.
Citation Information – Article Title: “Elk Basin United Oil Company.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/old-oil-stocks/elk-basin-united-oil-company. Last Updated: September 29, 2022. Original Published Date: October 1, 2021.
by Bruce Wells | Aug 16, 2022 | Petroleum History Almanac
“New Jersey Not a Good Field for Oil Investments.”
There would be no East Coast oil boom, despite enthusiastic promotions of a mythical New Jersey oilfield after a family in Millville decided to expand from real estate into oil exploration business on their farm in Cumberland County.
As early as August 1916, a West Coast newspaper covered the unusual attempt to find oil East Coast oil. “Lewis Steelman, the man who has been prospecting for oil near Millville, N.J., for some time, has begun active work to locate an oil well and he confidently expects to strike the fluid,” reported California’s Santa Ana Register.
Steelman Realty Gas & Oil Company
“Steelman has secured options on the property in the vicinity of his estate at Cumberland, near here, and has erected a derrick 75 feet high, by which the drilling will be done,” the newspaper explained.
A New Jersey “oil well” drilled in 1916 was said to have found a previously unknown geologic oil-bearing formation.
Steelman Realty Gas & Oil Company officially incorporated on November 13, 1916, with $300,000 in capital. Most of the company’s stock was sold to Pittsburgh independent producers. Officers included Lewis Steelman, Merton Steelman and Leroy Steelman. Their objective was to “drill for natural gas and oil on lands of the company.”
When a Steelman exploratory well reportedly discovered oil 800 feet deep on a 1,500-acre tract, the Petroleum Gazette in Titusville, Pennsylvania, took note of the discovery.
“Lewis Steelman struck oil on his estate four miles east of Millville in the depths of a big forest,” the Gazette reported. “Experts who were here several months ago assured Steelman that there was oil on the property and he built a derrick and today struck a deposit which it is believed will yield 25 barrels of crude oil daily.”
The Petroleum Gazette (published where the first U.S. oil well had been drilled in 1859) added that Steelman was not satisfied with the oil strike and would “go a few feet lower to protect himself from prospectors who might drain his well.”
Dr. von Hagen’s Predictions
With Steelman Realty Gas & Oil said to be buying hundreds of acres of forest land surrounding Steelman property, company stock sales were buttressed by the declarations of geologist Dr. H. J. von Hagen, cited as “one of the world’s greatest living geologists and petroleum engineers.”
Dr. von Hagen also predicted this previously unknown geologic oil-bearing formation extended into Maryland and West Virginia, varied in width, “but is nowhere more than fifteen miles across.” Dr. von Hagen had spent two years in tracing it, the newspaper added.
Covering news of the New Jersey wildcat well from North Carolina, the Durham Morning Herald reported Dr. von Hagen as one of the men who had struck oil at Millville. The newspaper quoted the geologist as saying the petroleum came from “a great belt which starts near Moncton, New Brunswick, reappears at the eastern end of Long Island, runs near Lakewood, N.J.”
Newspapers as far away as California reported the dubious New Jersey oil discovery.
“Dr. von Hagen says he and his associates have received a $100,000 offer for the well which they are sinking, and from which they can get about fifteen barrels of oil a day, though the final depth has not been reached,” reported the Morning Herald. Dr. Von Hagan himself leased thousands of acres of land east of Millville, as well as nearby Hammonton.
It looked like the beginning of New Jersey’s first commercial oil production. Then Bridgewater’s Courier-News reported startling news. “Dr. von Hagen and His Bag Gone,” the account began. “Residents of this city, Millville and other places in this section are puzzled over Dr. von Hagen and his oil locating scheme. The doctor is away, his offices here are unoccupied at the present, no oil has been struck, and no one has been asked to buy stock.”
The Courier-News also had something to say about the geologist and his unusual methods. “The story about the doctor sinking his wells for wireless communication with Germany is all rot. He claims to have discovered the secret of locating oil under ground. He has a little bag with a golden cord attached. When that Is held over ground where there is oil the bag becomes agitated and swings violently.”
Meanwhile, another account of the well from the Oil, Paint and Drug Reporter said the discovery had “brought considerable notoriety to a locality in which geologic conditions, as promptly announced by the State geologist, are unfavorable to the occurrence of oil in commercial quantities…No instance of oil seepage and no oil-bearing shales have ever been observed by any worker on the State Geological Survey.”
The publication added that the survey had been “continuously active since 1864” and the geology of New Jersey had been studied “to a more minute degree than that of any other State, the conclusion seems irresistible that they (oil-bearing formations) do not occur.”
No New Jersey Oil Boom
Articles describing a successful oil well in New Jersey nonetheless excited investors and apparently attracted more drillers and cable-tool rigs. “Discovery of Flow Near Millville, N.J., Starts Rush of Prospectors,” proclaimed the Gettysburg (Pennsylvania) Times. “The Steelman Realty, Gas and Oil Company, which recently struck oil at their well on the 1,500 [acre] tract three miles east of Millville, has received pipe for a second well which will be started at once.”
“The old timers called the woods road leading to the site Oil Well Road,” notes one Millville resident.
The newspaper said pipe and drills had arrived “for three independent concerns, and prospectors from Oklahoma and elsewhere will sink the wells on leased ground near the location of the well where oil has been struck.”
However, the state geologist remained dubious. “All drilling for oil here is extremely speculative and should be undertaken only by those who fully understand the hazards of the game and can afford to lose their entire venture,” he warned. “The public should therefore beware of stock-selling schemes based on reported discoveries or assumed occurrences of oil in New Jersey.”
An October 1917 report on the well’s status noted technical problems. “For months no work was done at the well owing to the loss of tools and obstruction of the casing (see Fishing in Petroleum Wells).” Despite this trouble, “the sale of stock in an oil and realty company controlling adjoining territory was actively pushed by some of the persons interested in the company which sank the well.”
Millville resident George Martin tracked down the abandoned New Jersey well.
Perhaps the New Jersey State Geologist had the last word about the well when:
“Facts have come to his knowledge which verify what he formerly suspected, namely, that the reputed discovery at Millville was a fake pure and simple, although not all of the persons interested in drilling the well had knowledge of the fraud.”
Steelman Realty, Gas and Oil Company stock certificates today are valued by collectors as remnants of a failed petroleum speculation scheme. “New Jersey Not a Good Field for Oil Investments,” concluded the April 1921 Oil Trade Journal.
For a thoroughly researched chronology of the Steelman well, visit the Millville Historical Society and see Paul M. McConnell’s “A Century Ago, Southern New Jersey Had Its Fifteen Minutes of Fame.”
Home to major East Coast refineries, New Jersey has never produced commercial quantities of oil or natural gas.
The American Oil & Gas Historical Society thanks long-time Millville resident George R. Martin, who trekked the countryside to find the Steelman well in 2017. “”My father and my uncle took me to see it many years ago,” he recalled. “The old timers called the woods road leading to the site Oil Well Road.”
The stories of exploration and production companies trying to join petroleum booms (and avoid busts) can be found updated in Is my Old Oil Stock worth Anything?
_______________________
Recommended Reading: The Prize: The Epic Quest for Oil, Money & Power (1991); Myth, Legend, Reality: Edwin Laurentine Drake and the Early Oil Industry
(2009). Your Amazon purchase benefits the American Oil & Gas Historical Society. As an Amazon Associate, AOGHS earns a commission from qualifying purchases.
_______________________
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 © 2022 Bruce A. Wells. All rights reserved.
Citation Information – Article Title: “Fake New Jersey Oil Well.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/oil-almanac/steelman-realty-gas-oil-company. Last Updated: August 24, 2022. Original Published Date: July 20, 2018.
