by Bruce Wells | Mar 7, 2021 | Petroleum Companies
The earliest U.S. petroleum exploration companies learned to look for natural seeps. A decade before the Montrose Gas, Oil and Coal Company organized in 1920, natural gas was known to seep from the ground in Susquehanna County, Pennsylvania.
“Natural Gas flowing from a hole near the back of the N. Philip Wheaton farm in Franklin township, seven miles from Montrose, has been used by the family for the past fifteen years for lighting and stoves,” noted a 1910 article in the Montrose Democrat.
Montrose, established in 1812 in the northeastern corner of Pennsylvania near the New York border, was known for its quarry sites, which yielded a blue sandstone popular as an architectural and building stone.
An aero-view or “bird’s eye” map of Montrose, Pennsylvania, by Thaddeus Mortimer Fowler depicted this Susquehanna County community in 1890. The area’s quarries produced a durable blue sandstone today known as Pennsylvania Bluestone.
In late 1920, Montrose Gas, Oil and Coal launched plans to drill for natural gas to serve markets just to the north in Binghamton, New York, and to the south in Scranton. Capitalized at $300,000, the company offered investors shares for $10 each through an expansive newspaper campaign.
“One good gas well, yielding an average of 5,000,000 cubic feet a day would mean an annual yield of $565,750,” proclaimed advertisements in the Scranton Republican. Many readers remembered the economic boom from an earlier Pennsylvania natural gas field (see Natural Gas is King in Pittsburgh).
Before the end of 1921, Montrose Gas, Oil and Coal had sold enough common stock to finance drilling near Franklin Fork, a few miles from Montrose. The company’s cable-tool rig found natural gas at a depth of just 200 feet. Production records cannot be found.
The Montrose Gas, Oil and Coal Company natural gas well of 1921. Although the Pennsylvania company failed, today beneath Susquehanna County lies the Marcellus Shale with an estimated 500 trillion cubic feet of natural gas. Photo courtesy of Susquehanna Historical Society, Horgan Collection.
“Many of the stockholders of the company residing in this immediate vicinity drove to the well as soon as the news was circulated in order to verify with their eyes what it seemed could hardly be true,” noted one contemporary account.
“A piece of tow (rope) was lighted and thrown down the ten-inch pipe, with the result that the lighted gas would flame up five feet in the air,” the report continued. “The flow has been steady ever since.”
Prospects for the company’s future looked good.
In April 1922, Montrose Gas, Oil and Coal stock still traded. As late as November, the company was considered viable and had plans to expand drilling operations in the field…if more funding could be secured.
However, the company soon disappeared from records. The Pennsylvania Internet Record Imaging System/Wells Information System, available online, may have further details.
Although the company drilled a successful natural gas well, newspaper advertisements to raise capital did not attract enough investors.
Today beneath Susquehanna County lies the Marcellus Shale with trillions cubic feet of natural gas, stretching through parts of New York State, Pennsylvania, Ohio and West Virginia.
In 2012 alone Susquehanna County landowners received $300 million in lease royalties. Modern recovery techniques such as hydraulic fracturing (fracking) and horizontal drilling have enabled extraction of this trapped gas.
But for Montrose Gas, Oil and Coal Company, such technology was years away. The company’s stock certificates may be valued by scripophily collectors for artistic and historical significance.
Cartographer Thaddeus Mortimer Fowler in 1890 published an aero view of Montrose – one of more than 400 Fowler panoramas, many depicting early oil boom towns, including an 1896 panorama of Titusville, Pennsylvania, where Edwin Drake launched the U.S. petroleum industry.
Learn more about oilfield artwork in Oil Town “Aero Views.”
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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? 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: “Montrose Gas, Oil and Coal Company.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/stocks/the-dramatic-oil-company. Last Updated: April 13, 2022. Original Published Date: March 7, 2014.
by Bruce Wells | Feb 1, 2021 | Petroleum Companies
Speculators once again converged on a small town in Eastland County in 1918 as yet another West Texas drilling boom began with a gusher. Spear Oil Company soon joined them.
In September a well producing 2,000 barrels of oil a day had blown in near Desdemona, one of the first Texas towns established west of the Brazos River.
The Desdemona oilfield, Eastland County, Texas, circa 1919. Library of Congress Prints and Photographs Division, Washington, D.C.
Desdemona had once been called Hog Town and Hog Creek Oil Company made the discovery (not a skilled conman’s Hog Creek Carruth Oil Company). Eastland County’s Ranger and Cisco communities experienced drilling booms the previous year.
The “Roaring Ranger” McClesky No. 1 well of October 1917 had reached a daily production of 1,700 barrels. Within two years eight refineries were open or under construction and Ranger banks had $5 million in deposits. ALso in North Texas, a 1918 gusher created boom town Burkburnett.
That oil field gained international fame for Ranger as the town that wiped out oil shortages during World War I, allowing the Allies to “float to victory on a wave of oil.” Eastland County’s Cisco would later gain fame as the crowded boom town Conrad Hilton visited after the war — and bought his first motel (see Oil Boom brings First Hilton Hotel).
Spear Oil Company
Spear Oil Company organized with capitalization of $1.75 million in 1919 — the same year the Desdemona field reached its peak annual production of almost 7.4 million barrels of oil.
With J.A. Spear as president and leases to drill in Desdemona, widespread promotion of stock sales was necessary to fund the of Stephensville, Texas, based new venture’s operations. But at least one oil stock promoter who had misrepresented the value of the region’s wells in 1914 was serving time in federal prison.
With oil stock promotions appearing in newspapers nationwide, states began taking action. In August 1919, the attorney general of South Carolina refused Spear Oil Company’s request to sell stock in his state because the company failed to comply with South Carolina “Blue Sky Laws.”
These new laws were designed to prevent the use of the U.S. Mail in stock promotion schemes. The South Carolina attorney general’s rejection excoriated the practice of “selling script or certificates of so-called ‘stock’ in the leasing and operation of what is claimed to be prospective development, producing and marketing of oil and gas in Texas.”
The trade publication United States Investor agreed. “We do not recommend Spear Oil as a purchase,” noted the magazine’s editors. “Apparently the people at the head of this company are much more at home selling stock than they are in operating an oil enterprise.”
Nonetheless, within a few months, a Wilmington newspaper published an “editorial” letter (no doubt paid for by the company) extolling Spear Oil Company properties.
Newspaper Ads and Editorials
“There are a number of wells being drilled on their royalties and several locations for wells on their solid leases,” the Wilmington Morning Star reported. “As a whole, we consider the securities of Spear Oil Company safe, with prospects for at least good, substantial dividends for many years and each of us has purchased a number of shares of their securities.”
The letter concluded: “In conclusion, we found the conditions and general outlook for the success of the company much better than we had expected, and even better than it had been represented to us. Respectfully submitted…”
Spear Oil did drill in Eastland County and complete oil wells. United States Investor was obliged to update and report net production of about 600 to 650 barrels per day from the company’s Desdemona operations in the southeast corner of Eastland County.
The company’s stock was still offered on the Fort Worth Exchange at $1.40 a share in September 1920, although it had not paid dividends and, “as yet and appears to be using its earnings for further development.” As far away as North Tonawanda, New York, promoters of Spear Oil wrote enthusiastic endorsements recommending the company’s stock.
Drilling a Well
In 1921, Spear Oil Company spudded its Blankenship No. 1 well, but soon shut it down and moved two strings of tools and three rigs to begin operations on another promising lease. The Blankenship No. 2 well’s progress was noted in oil trade publications.
“The Desdemona field now has approximately 315 completed wells that have a daily average production ranging from 4,000 to 6,000 barrels,” Oil Weekly reported on January 14, 1922.
“During the past week, the Spear Oil Company’s No. 2 Blankenship failed to show up as a producer after being shot with 20 quarts from 3,060 to 3,070 feet,” the publication added. “This well has a total depth of 3,085 feet, and is now being cleaned out.”
Learn more how a well was “shot” in Shooters – A Fracking History.
Meanwhile, the impact of over-drilling was clear as reservoir pressures and production from the field diminished. Spear Oil’s Blankenship No. 2 well failed along with many others and funding for continued operations could not be secured.
Stockholders of the failing Spear Oil Company were approached in 1923 by the famed (but fraudulent) North Pole explorer, Frederick Cook and his Petroleum Producers’ Association.
Cook’s stock manipulations and violations of blue sky laws ultimately landed him in prison, but not before many Spear Oil share owners were conned into exchanging their stock for Petroleum Producers’ Association while paying a 25 percent “bonus.”
Learn more about Cook in Arctic Explorer turns Oil Promoter.
Petroleum Producers’ Association stock was as worthless as Spear Oil Company’s, but investors were convinced otherwise, largely through the extraordinary promotional machinations of Seymour Cox. “Alphabet” Cox. The skilled huckster and others were convicted of ”dispersing stock-sales revenues as dividends, claiming income from non-producing wells, and otherwise misrepresenting the company’s position.”
Another notable fraudster, J.W. “Hog Creek” Carruth, created Pilgrim Oil Company and other shady oilfield ventures solely to bilk unwary investors.
It was not until 1934 that the Securities and Exchange Commission (SEC) was established to regulate the issue and sale of securities and to protect the public from increasingly clever stock promotions and manipulations. By then, Spear Oil Company was long gone. Its stock certificates may have value to scripophily collectors.
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The American Oil & Gas Historical Society preserves U.S. petroleum history. Join today as an annual AOGHS annual supporting member. Help maintain this energy education website and expand historical research. For more information, contact bawells@aoghs.org. Copyright © 2021 Bruce A. Wells. All rights reserved.
Citation Information – Article Title: “Spear Oil Company.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/oil-almanac/oil-riches-of-merriman-baptist-church. Last Updated: September 7, 2021. Original Published Date: February 1, 2014.
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by Bruce Wells | Jan 10, 2021 | Petroleum Companies
Lucky Jim Oil Company was created in March 1919 to pursue opportunities in the newly discovered West Columbia oilfield in Brazoria County, Texas (visit the Columbia Historical Museum in West Columbia to learn more about the first capital of the Republic of Texas).
The Brazoria County oilfield, 50 miles southwest of Houston, “was the youngest of the first rank salt dome oilfields of the Texas-Louisiana coastal region, and at present is the most productive of these fields,” reported the American Association of Petroleum Geologists (AAPG) in 1921.
Wind knocked down the first derrick of a Lucky Jim Oil Company well drilled in 1919. The well reached 3,340 feet before the company gave up – and reorganized as the Lucky Jim Junior Oil Company.
Like many competing exploration companies formed during Texas drilling booms, Lucky Jim Oil Company did not survive its first dry hole. A Lucky Jim Junior Oil Company fared no better.
West Columbia field
Wildcatters had become interested in the West Columbia after oil discoveries on a lease owned by a former Texas governor. Gov. J.S. “Big Jim” Hogg first thought oil might be there and leased the land in 1901 (learn more in Governor Hogg’s Texas Oil Wells).
When the Hogg No. 2 well was completed at 600 barrels of oil a day in January 1918, speculators rushed to lease nearby acreage. The 20-square-mile oilfield yielded more than 119,000 barrels of oil in 1918.
The Hogg discovery wells led to a local boom that attracted inexperienced, even fraudulent, drilling companies that would not long survive. They planned to drill near property with proven oil production.
Advertisements appeared in Texas newspapers that included $10 per share stock promotions enticing investment in the West Columbia oilfield — with a promise to pay out 75 percent of any net earnings to shareholders. The ads assured investors of early dividends and admonished, “Buy Today, Tomorrow May Be Too Late.”
The Texas Company (later Texaco) was among companies that found success in the 20-square-mile oilfield in Brazoria County. The field yielded more than 119,000 barrels of oil in 1918 alone.
Hedging against a dry hole and gambling on higher oil prices, Lucky Jim Oil declared in 1919, “We have immense holdings that we should be able to sell out on the present rise of prices in West Columbia, and pay our stockholders three or four for one on their investment without drilling a well.”
With funding from stock sales, the company was able to begin drilling its first well, the Brown No. 1, proclaiming it to be “within 1,800-feet of the Texas Company’s 20,000 barrel gusher.”
Drilling progressed for a few months until the derrick reportedly collapsed in high winds during a September storm. After rebuilding the wooden structure and resuming drilling, the well reached 3,340 feet. It was an expensive dry hole.
Lucky Jim Junior Oil Company
Within a month of the failed exploratory well, a reorganized Lucky Jim Junior Oil Company made its first appearance and tried again to secure funding to launch drilling operations in the crowded West Columbia oilfield.
A drilling boom resulted in the West Columbia oilfield reaching its annual peak production of 12.5 million barrels of oil a few years after its discovery.
The new company did not succeed in raising enough capital and soon disappeared, along with many other such “poor boy” operations in South Texas at the time. Only larger companies could absorb costs of a dry hole and continue drilling.
The Texas Company (later Texaco) – after drilling several dry holes in the West Columbia field – in July 1920 brought in the Abrams No. 1 well, which produced 26,500 barrels a day for six weeks (see Sour Lake produces Texaco).
By 1921, the West Columbia field reached its peak annual production of 12.5 million barrels of oil — but by then the Lucky Jim Oil Company and Lucky Jim Junior Oil Company were both history.
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?
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Recommended Reading: Early Texas Oil: A Photographic History, 1866-1936
(2000); Wildcatters: Texas Independent Oilmen
(1984). 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 © 2021 Bruce A. Wells. All rights reserved.
Citation Information – Article Title: “Lucky Jim Oil Company.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/stocks/lucky-jim-oil-company. Last Updated: September 4, 2021. Original Published Date: September 8, 2015.
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by Bruce Wells | Jan 1, 2021 | Petroleum Companies
Boom and bust of an obscure mid-continent petroleum company began in 1917.
The International Petroleum Register noted formation of Oklahoma-Texas Producing & Refining Company as a Delaware corporation in 1917. With capitalization of $5 million in common stock authorized and more than $734,000 issued, the company obtained leases in Muskogee, Tulsa, Rogers, and Okmulgee counties in Oklahoma, and in Allen County, Kansas.
Major north Texas oilfield discoveries in Electra (1911) and Ranger (1917) attracted petroleum companies to the mid-continent. As oil demand soared during World War I, hundreds of new exploration and productions companies formed — and sought investors. Most of these companies would not survive.
By 1919, Oklahoma-Texas Producing & Refining’s lease ownership had expanded to 10,313 acres with an additional 815 acres from its acquisition of Tulsa Union Oil Company. About this time, all of the company’s petroleum production was sold to Prairie Oil and Gas Company.
Oklahoma-Texas Producing & Refining meanwhile continued drilling for oil in Coffee County, Kansas, and elsewhere, and the company’s estimated production reached 10,000 barrels of oil each month — a promising development for investors. The financial magazine United States Investor added a positive endorsement in May 1920 after Oklahoma-Texas Producing & Refining reported production of 27,000 barrels of oil worth $65,000.
“It appears that this company is further along the road to development that a great many of the new oil companies, though whether its shares at the present offering price of $2.50 on the basis of a $1 par represent an extravagant price, cannot be told until further developments have occurred,” United States Investor reported.
However, six months later, the company’s shares were selling for less than 14 cents. Records of what went wrong are obscure. There are references to a convoluted business venture with another oil company. The deal was orchestrated by New York financier Mrs. Ada M. Barr after Oklahoma-Texas Producing & Refining had failed in January 1921.The next month, after being put in the hands of a receiver, the company’s assets were sold for $87,400.
The buyer was Mrs. Barr, who soon would be enveloped in controversy and litigation of her own.
Acorn Petroleum Corporation, represented by Mrs. Barr, offered bonds in the amount of $150,000 of Acorn Petroleum Corporation on the basis of $250 in bonds for each $1,000 of Oklahoma-Texas Producing & Refining stock held.
“The new company is operating the properties and has twenty-three producing wells, giving about ninety barrels of oil a day. The present low price for oil does not enable the company to earn sufficient income to pay interest on its bonds,” United States Investor noted. “Mrs. A.M. Barr, who arranged the financing of the new company, says that as soon as oil advances to a price that will permit, accrued interest on the bonds and dividends on the stock will be paid.”
But they weren’t.
By March 1923, investor Lewis H. Corbit filed a petition on behalf of a large number of local purchasers of stocks in the Acorn Petroleum Corporation of Tulsa, Oklahoma. The petition in the United States District court sought to determine the value of the local holdings, which represent an investment of approximately $100,000.
According to records, “In his complaint, asking for an investigation, Corbit alleges a stock, fraud in which $ 500,000 is involved. Certificates of shares held here were sold by a Mrs. A. M. Barr, it is disclosed in the petition.”
Further financial records and other details about Oklahoma-Texas Producing & Refining Company, Acorn Petroleum Corporation, and Mrs. Ada M. Barr can be research through the Library of Congress’ online Chronicling America: Historic American Newspapers.
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The stories of exploration and production (E&P) companies joining U.S. 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. 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 © 2021 Bruce A. Wells. All rights reserved.
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by Bruce Wells | Jan 1, 2021 | Petroleum Companies
Somerset, Texas, was a quiet farming community about 15 miles from San Antonio on the Artesian Belt Railroad in 1913 when one of the town founders, Carl Kurz, discovered oil while drilling for water. The same thing had happened at Corsicana in 1894, bringing the first Texas oil boom.
The Somerset oilfield, which would extend south of Pleasanton, became known as “the largest known shallow field in the world at that time.” It joined other Texas discoveries making headlines since the 1901 “Lucas Gusher” at Spindletop.
In Springfield, Massachusetts, almost 2,000 miles from Somerset, a group businessmen formed New England-Texas Oil Refining Syndicate, one of many companies to explore for oil southwest of San Antonio. Part of their incentive might have been a well owned by W.C. Steubing near the Somerset field.
Drilling the exploratory well with a rotary rig began on September 30, 1918, two miles southeast of Somerset. But three months and 1,688 feet deep later, Steubing’s well, the Sarah Smith No. 1, well proved to be an expensive “dry hole.” The New England-Texas Oil Refining Syndicate incorporated in Massachusetts with capitalization of $1 million and 200,000 shares of its stock with a nominal par value of $5.
“It is announced by Judge M.L. Barr, of Springfield, Mass., who recently arrived here to direct the oil operations of the New England-Texas Oil Refining Syndicate in the Somerset field, adjacent to San Antonio, that the company will proceed immediately to drill 100 wells on its leases,” noted Oil Paint and Drug Reporter in April 18, 1921.
The syndicate’s holdings included 330 acres from Glasscock Leasing Company, Clover Leaf Oil Company and others, the publication reported. Some 100 acres were leased near Fort Stockton and 30,000 acres of leases signed in Llano and Mason counties.
Back in Northampton, Massachusetts, more than 75 percent of shareholders were present personally or by proxy to elect their board of trustees for the New England-Texas Oil Refining Syndicate: Frederick L. Haskins, Thomas Brooks, and James E. Ryan.
The Petroleum Age trade publication added that syndicate trustee Frederick L. Haskins, “has taken over a considerable acreage in Somerset, and has announced that in addition to developing the shallow oil, a deep test will be started as soon as a contract can be made.”
At the time, the Somerset oilfield had nearly 300 shallow wells producing an aggregate of about 2,500 barrels of high-gravity crude oil daily.
But in January 1922, the United States Investor report the likely financial demise of the New England-Texas Oil Refining Syndicate. “We have seen nothing lately on this company and believe that very little market exists for the stock, as is the case of so many companies which have arisen within a year or two,” the business editors proclaimed.
Although New England-Texas Oil Refining Syndicate began rigging up to drill the Sarah Smith No. 2 well near the original W.C. Steubing well site, progress was slow. The Oil Weekly For several months, tracked the well’s status, but apparently nothing happened beyond erecting the drilling derrick.
The Texas Railroad Commission might have historical information about New England-Texas Oil Refining Syndicate. Another potential source is the Massachusetts Corporations Division.
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The stories of exploration 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 energy education website. For membership information, contact bawells@aoghs.org. © 2021 AOGHS.
by Bruce Wells | Mar 27, 2020 | Petroleum Companies
Seaboard Oil & Gas Company is sometimes confused with a different venture, Seaboard Oil Company.
Seaboard Oil & Gas Company organized in March 1918 capitalized at $1.5 million. It established offices in Oklahoma. By 1920, the company reported 33 producing oil wells and the income resulted in dividends to investors and the purchase of additional leases and assets.
However, a dispute with the Bank of Oklahoma resulted in extended litigation. Seaboard Oil & Gas nonetheless acquired Mid-Texas Petroleum Company and its producing properties in Young County, Texas. Buy 1922, the company’s profits were substantially diminished because of the reduced market price of oil. Investment analysts urged caution.
“The last statement of the company available to us did not indicate so strong a financial position as to warrant recommendation by us that this stock is deserving of consideration as a speculation at existing prices,” reported United States Investor.
In 1924, the company removed its $5 par value from issued stock, pending listing of a new stock of no par value. The company’s fortunes continued to fade and in 1926, it tried to raise additional funding through an increase in capitalization to $3.5 million with a corresponding stock marketing push.
Stocks were sold as late as 1930, but the company lost its charter and went out of business. No shareholder equity survived at that time. Old Seaboard Oil & Gas Company stock certificates have only collectible value. The other similarly named venture, Seaboard Oil Company, by way of mergers and acquisitions, became part of The Texas Company in 1958.
Read more about companies that rushed to Texas oilfields in the 1920s in Pump Jack Capital Of Texas.
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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. © 2021 Bruce A. Wells.
