by Bruce Wells | Apr 11, 2023 | Petroleum Companies
A Nevada independent oil company made headlines just one month after it was formed in 1960. It would not bode well for Henderson and Las Vegas investors.
“Geologist Claims There’s Oil At Foot Of Black Mt.,” the Henderson Home News proclaimed in its February 4, 1960, edition. “Starts Drilling Operations Tomorrow,” the headline continued.
The Nevada newspaper quoted the newly formed Trans-World Oil Company and on-site petroleum expert A.J. (Arthur James) Bandy. The consulting geologist also owned Petroleum Engineering Company of Bakersfield, California, home to prolific Kern County oilfields.
The Henderson, Nevada, newspaper added to the public’s oil fever with February 1960 headlines like “Well! Well! Well! City Might Try For Another.”
As Trans-World Oil began exploring for petroleum at Henderson, A.J. Bandy educated newspaper readers about geology.
“The oil found here is a gift of the sea, formed by deposits of marine mollusks and mammals, and still later by the hulks of enormous Saurians which stomped the earth in the Permian era,” Bandy proclaimed. His enthusiasm would prove misinformed.
Company officers J.K. Houssels, Leonard Wilson and Bill Boyd had leased 5,000 acres southeast of Las Vegas. They chose a drilling site in what later became O’Callaghan Park in Henderson.
As nearby drilling continued in 1960, the Henderson newspaper quoted enthusiastic reports form the company geologist.
With drilling of the Houssels-Wilson-Milka No. 1 well beginning on February 4, 1960, the Henderson Home News began periodic updates for its readership — which included potential investors in Trans-World Oil Company.
Making Hole
After a month of drilling with an obsolete cable-tool rig to reach 300 feet, the consulting geologist urged going deeper.
“I know that between seven hundred and eight hundred feet we will have a commercial showing – maybe even a gusher,” Bandy declared of the Clark County wildcat well. By March there indeed were intermittent showings of oil and natural gas.
“We’ve struck oil!” A.J. Bandy proclaimed on April 4, telling the Henderson Home News that he had drilled into commercial quality oil strata at 1,312 feet.
“Henderson will have oil wells all over the place – there’s oil under the whole town,” the front page exulted. Bandy further explained that drilling had been stopped so an electric log could be run the next day.
“If you don’t believe it, go cut yourself a slice of sand up there which has been taken from the hole,” Bandy said. “Put the sand in a bottle and put ether in it. Then shake it. Oil will come out of it.”
However, at least one local oilman was skeptical. “I’ll drink every gallon of oil that’s found here,” said Mark Leff, who reportedly “laughed off any possibility of such a find.”
Despite Leff’s doubts, “several Las Vegas people” invested in geologist Bandy and Trans-World Oil, which continued to drill until July 1960. There were no more showings of oil or natural gas, no Henderson oilfield.
When the total depth reached 2,155 feet, the company suspended drilling.
People vs. Bandy
The well remained idle for two years as Trans-World Oil’s fate became increasingly obscure — and “consulting geologist” Bandy discovered problems of his own. On August 9, 1961, a California court convicted A.J. Bandy of check fraud.
Court documents report that Petroleum Engineering Company was “a fictitious firm name adopted by defendant Bandy” and that the company’s address “was a telephone answering service.”
Bandy’s deceptive business checks were “a specially printed form containing a picture of a gushing oil well.” His final appeal was denied on May 21, 1963. People vs. Bandy documents note the defendant’s credibility was impeached by three prior convictions dating back to 1942, including one for federal criminal conspiracy. He ended up in San Quentin.
A map of Henderson, Nevada, today a Las Vegas suburb. The blue dot is the 1960 drilling site of the Tans-World Oil Company exploratory well north of O’Callaghan Park. Map courtesy U.S. Geological Survey.
Former Trans-World Oil company officer Leonard Wilson took one last gamble on the Houssels-Wilson-Milka No. 1 well. In March 1962, he returned to the site and drilled another 145 feet over the next five months. The added depth still found no commercial quantities of petroleum.
Admitting defeat on August 6, 1962, Wilson plugged and abandoned the once headline-making well.
The last business days and fate of Trans-World Oil Company have been lost. The Henderson Home News quit reporting on the Nevada oil patch venture. The newspaper ceased publication in 2010 after being acquired by the Las Vegas Sun.
First Nevada Oil Well
On February 12, 1954, after decades of noncommercial wells — the first drilled 1,890 feet deep near Reno in 1907 — Nevada became an oil producing state.
Shell Oil Company’s second test of its Eagle Springs No. 1 well found oil in Railroad Valley, Nye County. The well, 260 miles north of Trans-World Oil’s attempt, revealed Nevada’s first oilfield, according to the Nevada Bureau of Mines and Geology.
The discovery well produced oil from a productive interval between 6,450 and 6,730 feet deep. About a dozen wells in the Eagle Springs oilfield produce 3.8 million barrels by 1987.
Learn more in First Nevada Oil Well.
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Recommended Reading: Roadside Geology of Nevada
(2017). 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 (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. © 2023 Bruce A. Wells.
Citation Information – Article Title: “Trans-World Oil Company.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/old-oil-stocks/trans-world-oil-company. Last Updated: April 15, 2023. Original Published Date: May 15, 2015.
by Bruce Wells | Apr 9, 2023 | Petroleum Companies
John Wilkes Booth and his actor friends drilled for Pennsylvania oil in 1864 — and found it.
After forming an oil company and drilling for “black gold” in booming northwestern Pennsylvania, the actor’s dreams of a petroleum fortune collapsed in June 1864. He then sought fame as a martyr to the Confederacy. A failed oilman turned assassin.
As the Civil War approached its bloody conclusion, John Wilkes Booth in January 1864 made the first of several trips to Franklin, Pennsylvania, where he purchased an oil lease on the Fuller farm. Maps reveal the three-acre strip of land on the farm, about one mile south of Franklin and on the east side of the Allegheny River. (more…)
by Bruce Wells | Apr 1, 2023 | Petroleum Companies
High hopes for oil riches from someone’s family heirloom.
Tony Marohn’s $5 Palmer Union Oil Company stock certificate did not make him a Coca-Cola millionaire. As with most obsolete securities, no ownership in the company or its successors remains.
For many people like Marohn, discovering an old stock certificate brings hopes of wealth. This seems especially true if the certificate is one of the thousands of petroleum companies incorporated since the first, the Pennsylvania Rock Oil Company of New York, organized in 1855.
Tony Marohn’s $5 Palmer Union Oil Company stock certificate from 1924.
Unfortunately, as the research posted in Is My Oil Oil Stock worth Anything? shows, the highly competitive, boom-and-bust world of oil and natural gas exploration leaves many casualties. (more…)
by Bruce Wells | Apr 1, 2023 | Petroleum Companies
Learning hard lessons about wasteful overproduction and depleted reservoir pressures.
The discovery of oil along a small creek in Titusville, Pennsylvania, in August 1859 launched the American petroleum industry. Drilled just 69.5 feet deep at Oil Creek by former railroad conductor Edwin Drake, the well produced oil that could be refined into an inexpensive lamp fuel, kerosene.
Drake, who pioneered drilling technology, borrowed a local kitchen water pump to fill the first oil barrels. Early oil production from his and other northwestern Pennsylvania wells brought new refineries to Oil City and Pittsburgh on the Allegheny River. Demand for kerosene quickly outpaced the inexpensive but volatile lamp fuel camphene.
Kerosene also replaced expensive whale oil. A typical four-year whaling voyage returned with 40,000 gallons; New oilfields produced 10 million gallons of kerosene in 1860 alone.
Four acres close to the Sherman well sold for $220,000 as venture oil capitalists, entrepreneurs, and speculators tried their luck in the newly created petroleum industry.
Drake’s well, drilled for the first U.S. oil company established by George Bissell, brought the country’s first drilling boom as entrepreneurs rushed in. Farmers who leased their land were among the first to benefit.
“Oil Creek was soon taken up and within a relatively short time, the entire valley as far back as into the hillsides, had been leased or purchased,” author Paul Gibbons noted.
With the science of petroleum geology yet to debut, early oil explorers searched near oil seeps and the “rich territory was limited to flats along the streams,” Gibbons added. Natural gas discoveries would later arrive to the benefit of Pittsburgh industries.
Sherman Well of 1861
J.T. Foster’s farm on Pioneer Run hillside off Oil Creek was in “the dry diggings” where few were willing to gamble. Nonetheless, newly minted oil operators gathered investors to try to find oil. Capital was hard to come by.
On the 200-acre Foster farm, one struggling and almost cashless outfit had to trade a one-sixteenth interest for $80 and an old shotgun to continue drilling on its Sherman well.
Drilling along Oil Creek continued undiminished, but in September 1861 on the Funk farm, the Empire well began flowing a river of oil under its own pressure. They called it a “fountain well.” Some said it initially produced 2,000 barrels of oil a day. Other successful wells followed.
Back on the Foster farm lease, the Sherman well (saved earlier for $80 and a shotgun) in March 1862 was completed as the “best single strike of the year,” despite being “above all the other flowing wells” according to the Hornellsville Tribune. Leases became highly prized and, as historian Terence Daintith observed, “subleasing was also a money machine.”
Oilfield offices of the Shoe & Leather Petroleum company, David Harris Supply Company, and the Foster Farm Oil Company, which drilled an 1866 well that produced 300 barrels of oil.
The Venango Citizen reported, “Territory along the river above and below Franklin has been changing hands at high figures, and preparations are being made for active work.”
Just four acres close to the Sherman well sold for $220,000 as venture capitalists, entrepreneurs, and speculators tried their luck in the newly created petroleum industry. The Foster Farm Oil Company and the Shoe & Leather Petroleum Company were among many corporations formed to exploit exploration opportunities.
Foster Farm Oil Company
Foster Farm Oil Company incorporated in February 1865. Based in Philadelphia and capitalized at $1.5 million, the company offered 150,000 shares to the public. “The Foster Farm is owned by a company of ten gentlemen, and is known as the Foster Farm Oil Company,” reported the The Titusville Morning Herald. E.C. Bishop (Elisa Chapman ) was principal owner as well as one time general agent, treasurer, and superintendent.
The new company secured acreage on the Foster farm that already had 12 wells pumping 100 barrels of oil a day. Foster leased acreage in small tracts to several new companies vying for closest proximity to known producers. Oil prices had always fluctuated wildly, but a standard 42-gallon barrel of crude oil sold in 1865 for about $6.50, including a Civil War excise tax of $1 per barrel.
Foster Farm Oil Company continued drilling and subleasing small tracts. In April 1866, it drilled a well producing 300 barrels of oil a day from 612 feet deep. Then a second well produced at 310 barrels, a third at 100, and another at 350 barrels of oil a day. In 1867, Foster Farm Oil Company sold 1,000 barrels of oil at $2.10 each.
All over the Pioneer Run hillside, wooden derricks with steam engines pumped away even as overproduction drained the oilfield. Margins disappeared and companies began to fail.
Foster Farm Oil Company’s fortunes faded, as did the value of its stock. In 1869, total U.S. oil production topped 4 million barrels and oversupply drove many out of business. After 10 years in the oil patch, Elisha C. Foster departed to enter the banking business in Connecticut.
By 1871, shares of Foster Farm Oil were being auctioned off along with other “Stocks, Loans, etc.” The following year, 5,000 shares of Foster Farm Oil Company were offered at 11 cents a share. Litigation began to overtake the failing company in 1873; it would continue long after the drilling boom had moved on, finally being settled by the Connecticut Superior Court in 1886.
Shoe & Leather Petroleum
Shoe & Leather Petroleum Company incorporated in New York City in March 1865 to join the Pennsylvania oil rush. The company initially capitalized at $400,000, later reduced to $160,000. “Until the spring of 1865, the Foster Farm, Pioneer Run and vicinity were considered dry territory. Through the exertions of Mr. David Harris of this city, the Shoe & Leather Petroleum was formed,” reported the Titusville Morning Herald.
The company leased six acres on the Foster farm, then subleased them into 11 smaller tracts – the kind sought by smaller, speculative operations. “Substantial leaseholders could milk their leases by subleasing small lots for large premiums and high royalties,” historian Daintith later noted. “Far more money could be made this way than by actual production.”
By 1867, Shoe & Leather Petroleum had five producing wells, on five different tracts, with five different operators, yielding about 350 barrels of oil a day. But frantic production at Pioneer Run and Oil Creek, compelled land owners above oil reserves to drill, “regardless of price or market demand, in order to prevent his neighbor from draining his reserves.”
This traditional “law of capture” rendered an oily landscape thick with derricks, according to local accounts.
Overproduction and waste depleted reservoir pressures. Wells were pumped dry. Triumph Hill, and Pithole and other examples reinforced the precedent of oil discovery leading to drilling boom, and then to inevitable bust. By 1902, United States Investor reported Shoe Leather & Petroleum Company had “disappeared” and concluded, “The supposition is that the company has gone out of existence.”
In 1904, Smythe’s Directory of Obsolete American Securities and Corporations described Shoe & Leather Petroleum, “Extinct. Stock worthless.”
The stories of exploration and production companies can be found updated in Is my Old Oil Stock worth Anything?
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Recommended Reading: Cherry Run Valley: Plumer, Pithole, and Oil City, Pennsylvania
(2000); 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.
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The American Oil & Gas Historical Society 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 © 2023 Bruce A. Wells. All rights reserved.
Citation Information – Article Title: “Early Wells of Oil Creek.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/stocks/early-wells-of-oil-creek. Last Updated: April 1, 2023. Original Published Date: December 22, 2018.
by Bruce Wells | Apr 1, 2023 | Petroleum Companies
Chicago business sought risky shale opportunities during WWI.
As the end of the 20th century, record-breaking petroleum production from shale grew thanks to drilling and production technologies that produced from low permeability “tight oil” formations. But a century ago, oil shale was an unconventional resource mined, crushed and transported to a retorting facility.
At the beginning of the 20th century, mining shale was an oil extraction process that converted organic matter within the rock (kerogen) into synthetic oil and gas, which could be used as a fuel or upgraded for an oil refinery feedstock.
By 1912, the strategic importance of America’s mined oil shale production led to establishment of the Naval Petroleum and Oil Shale Reserves in 1912, “to insulate the United States from foreign dependency on oil during times of war.”
Meanwhile, fuel oil also began replacing coal in U.S. warships (See Petroleum and Sea Power), as World War I erupted in Europe. After more than three years of neutrality, America entered the war on April 2, 1917.
Commissioned in 1914 with coal-powered boilers, the battleship the USS Texas was converted to use fuel oil in 1925. Photo courtesy Texas Parks and Wildlife Department,
Recognizing wartime demand for oil, Van H. Manning, director, U.S. Bureau of Mines, declared, “We have as yet untouched our great reserves of shale that contain oil…and are conservatively estimated to contain many times the amount of oil that has been or will have been produced from all the porous formations in this country.”
Central Oil Shale Refining Company formed with $500,000 capitalization and set up offices in Chicago. The venture saw a financial opportunity in mining oil shale and secured leases on 480 acres in Garfield County, Colorado, an area with known deposits.
Central Oil Shale Refining also leased a total of about 5,000 acres in Kentucky, Kansas, and Texas. These investments were a gamble on the margins of supply and demand.
Despite the risks, Central Oil Shale Refining presented “Expert Information on Oil Shale” to stockholders and potential investors at Chicago’s Palmer House hotel. Company executives promoted the mining and distillation of Colorado oil shales as an opportunity not to be missed. It helped that publications like Oil Field Engineering (December 1917) proclaimed oil shales as “A New Source of Gasoline.”
Shale Business Model
Oil shale operator Joseph Bellis presented a business model to the Palmer House audience, describing oil shale production process and economics. Bellis, a veteran of Colorado oil shale mining in the Piceance Creek Basin, later published a paper in the Colorado School of Mines’ quarterly magazine.
Billis’ presentation may have helped Central Oil Shale Refining stock sales, but the company’s trajectory had already been determined on a farm near Ranger, Texas.
Concerns about U.S. wartime oil supplies declined — along with oil prices — soon after an October 17, 1917, gusher halfway between Abilene and Dallas. Still annually celebrated by area residents, “Roaring Ranger” J.H. McCleskey No. 1 well produced 1,600 barrels of oil a day. Other wells in the oilfield would yield up to 10,000 barrels of oil daily.
The North Texas drilling boom opened giant fields near Desdemona and Breckenridge (Conrad Hilton would buy his first motel in Cisco). An even bigger oilfield was found in 1918 at Burkburnett, near Wichita Falls. With suddenly abundant supplies, oil sold for less than $2 per barrel — five cents a gallon.
Central Oil Shale Refining was in deep trouble. Even if every ton mined resulted in 50 gallons of oil, it would take more than 1,300 tons of shale every day to match the McCleskey’s well production alone. The numbers didn’t work and debts needed to be paid.
In one last effort to survive, Central Oil Shale Refining reorganized with the same officers, moved its offices, and subtly changed its name to Central Oil Shale and Refining Company. The new company quickly failed, leaving a brief shadow in financial records.
Another example of producing commercial quantities of petroleum from shale can be found in Ute Oil Company – Oil Shale Pioneer. By the 1980s, new technologies revolutionized petroleum production from low-permeability shales — especially for natural gas.
Although geologists had known of the potential of drilling in these “tight oil” formations, only one percent of U.S. natural gas production came from shale as late as 2000. But by applying horizontal drilling and hydraulic fracturing techniques, in 2010 shale gas production reached more than 20 percent, according to the U.S. Energy Information Administration.
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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. © 2023 Bruce A. Wells.
Citation Information – Article Title: “Central Oil Shale Refining Company.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https:https://aoghs.org/old-oil-stocks/central-oil-shale-refining-company. Last Updated: April 22, 2023. Original Published Date: April 1, 2019.
by Bruce Wells | Feb 16, 2023 | Petroleum Companies
Maj. Gordon W. “Pawnee Bill” Lillie caught oil fever in 1918.
With American fighting “the war to end all wars” in Europe, a popular Oklahoma showman launched his own oil exploration and refining company.
Although not as famous as his friend Col. William F. “Buffalo Bill” Cody of Wyoming, Maj. Gordon William “Pawnee Bill” Lillie was “widely known as a showman, a teacher and friend of the Indian,” according to his biographer.
Pawnee Bill and Buffalo Bill combined their shows from 1908 to 1913 as “Buffalo Bill’s Wild West and Pawnee Bill’s Great Far East.”
Maj. Lillie was admired for being a “colonizer in Oklahoma and builder of his state,” noted Stillwater journalist Glenn Shirley in his 1958 book Pawnee Bill: A Biography of Major Gordon W. Lillie.
The two popular entertainers joined their shows in 1908 to form “Buffalo Bill’s Wild West and Pawnee Bill’s Great Far East,” promoted as “a glorious cavalcade of dazzling brilliancy,” noted Shirley, adding that the combined shows offered, “an almost endless procession of delightful sight and sensations.”
However, times were changing as public taste turned to a new form of entertainment, motion picture shows.
By 1913, the two showmen’s partnership was over and their western cavalcade foreclosed. Lillie turned to other ventures — real estate, banking, ranching, and like his former partner Cody, the petroleum industry.
Oklahoma oilfield discoveries near Yale (population of only 685 in 1913) had created a drilling boom that made it home to 20 oil companies and 14 refineries. In 1916, Petrol Refining Company added a 1,000-barrel-a-day-capacity plant in Yale, about 25 miles south of Lillie’s ranch.
The trade magazine Petroleum Age, which had covered the 1917 “Roaring Ranger” oilfield discovery in Texas, reported that for Pawnee Bill, “the lure of the oil game was too strong to overcome.”
Obsolete financial stock certificates with interesting histories like Pawnee Bill Oil Company are valued by collectors.
The Oklahoma showman founded the Pawnee Bill Oil Company on February 25, 1918, and bought Petrol Refining’s new “skimming” refinery in March.
An early type of refining, skimming (or topping) removed light oils, gasoline and kerosene and left a residual oil that could also be sold as a basic fuel. To meet growing demand for kerosene lamp fuel, early refineries built west of the Mississippi River often used the inefficient but simple process.
Maj. Gordon William “Pawnee Bill” Lillie (1860-1942).
Lillie’s company became known as Pawnee Bill Oil & Refining and contracted with the Twin State Oil Company for oil from nearby leases in Payne County.
Under headlines like “Pawnee Bill In Oil” and “Hero of Frontier Days Tries the Biggest Game in All the World,” the Petroleum Age proclaimed:
“Pawnee Bill, sole survivor of that heroic band of men who spread the romance of the frontier days over the world…who used to scout on the ragged edge of semi-savage civilization, is doing his bit to supply Uncle Sam and his allies with the stuff that enables armies to save civilization.”
Post War Bust
By July 30, 1919, Pawnee Bill Oil (and Refining) Company had leased 25 railroad tank cars, each with a capacity of about 8,300 gallons. But the end of “the war to end all wars” drastically reduced demand for oil and refined petroleum products. Just two year later, Oklahoma refineries were operating at about 50 per cent capacity, with 39 plants shut down.
Although Lillie’s refinery was among those closed, he did not give up. In February 1921, he incorporated the Buffalo Refining Company and took over the Yale refinery’s operations. He was president and treasurer of the new company. But by June 1922, the Yale refinery was making daily runs of 700 barrels of oil, about half its skimming capacity.
Yale, Oklahoma, in 1909, just a few years before the oil boom that attracted Pawnee Bill from his ranch 20 miles away.
“At the annual stockholders’ meeting held at the offices of the Pawnee Bill Oil company in Yale, Oklahoma, in April, it was voted to declare an eight per cent dividend,” reported the Wichita Daily Eagle. “The officers and directors have been highly complimented for their judicious and able handling, of the affairs of the company through the strenuous times the oil industry has passed through since the Armistice was signed.”
The Kansas newspaper added that although many Independent refineries had been sold at receivers’ sale, “the financial condition of the Pawnee Bill company is in fine shape,”
Buffalo Bill’s Shoshone Oil
What happened next has been hard to determine since financial records of the Pawnee Bill Oil Company are rare. A 1918 stock certificate signed by Lillie, valued by collectors one hundred years later, could be found selling online for about $2,500.
Maj. Gordon William “Pawnee Bill” Lillie’s friend and partner Col. William F. “Buffalo Bill” Cody also caught oil fever, forming several Wyoming oil exploration ventures, including the Shoshone Oil Company.
Another legend of the Old West, lawman and gambler Wyatt Earp, in 1920 began his own search for black gold wealth on a barren piece of California scrub land. A century later, his Kern County lease still paid royalties. Learn more about his Kern County leases in Wyatt Earp’s California Oil Wells.
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Recommended Reading: Pawnee Bill: A Biography of Major Gordon W. Lillie
(1958). Your Amazon purchases benefit 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. 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 © 2023 Bruce A. Wells. All rights reserved.
Citation Information – Article Title: “Pawnee Bill Oil Company.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/stocks/pawnee-bill-oil-company. Last Updated: February 16, 2023. Original Published Date: February 24, 2017.
