Early Wells of Oil Creek

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 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.

foster farm and oil wells in PA map

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 on the farm became highly prized. Historian and author Terence Daintith observed that “subleasing was also a money machine.”

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.

Foster Farm Oil Company building circa 1866,

Foster Farm Oil Company drilled an 1866 well that produced 300 barrels of oil.

The Foster Farm Oil Company and the oddly named Shoe & Leather Petroleum Company were among the 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.

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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. Vanango County historians confirm, “Not one of the other fifty or sixty wells on the Foster farm, some of them Sherman’s, was particularly noteworthy.

”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.

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 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: “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 10, 2021. Original Published Date: December 22, 2018.

 

Dramatic Oil Company

John Wilkes Booth and 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 of the day 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.

Hidden deep in the woods of the “Valley that Changed the World,” a small concrete marker can be found (with some effort) at the actual site where the future assassin drilled for oil. The weathered post and Booth’s capped well stand about 20 miles south of larger monument at an oil museum and park at Titusville — where the first commercial U.S. oil well was drilled by former railroad conductor Edwin L. Drake.

Dramatic Oil founder John Wilkes Booth portrait by Alexander Gardner.

John Wilkes Booth’s dreams of Pennsylvania oil wealth ended in July 1864. Photo by Alexander Gardner courtesy Library of Congress.

Drilled for the Seneca Oil Company of New Haven, Connecticut, Drake’s August 27, 1859, discovery launched a drilling boom that made newspaper headlines (the industry’s first “dry hole” a few days later did not). Investors had organized Seneca Oil for  tax advantages after founding the first American oil company established to drill for oil, the Pennsylvania Rock Oil Company of New York. (more…)

Pawnee Bill Oil Company

Maj. Gordon W. Lillie caught Oklahoma oil fever in 1918.

 

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 western show poster circa 1910

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 also 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 Bills 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,” Shirley proclaimed, adding that the combined shows offered “an almost endless procession of delightful sight and sensations.”

However, times were changing and public taste was turning to a new form of entertainment, motion pictures. By 1913, the showmen’s partnership was over and their show foreclosed. Lillie turned to other ventures — real estate, banking, ranching, and like his former partner Cody, the U.S. petroleum industry.

Oil 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 Oklahoma ranch.

Pawnee Bill Oil Company stock certficate.

Obsolete financial stock certificates with interesting histories like Pawnee Bill Oil Company are valued by collectors.

The trade magazine Petroleum Age reported that for Pawnee Bill, “the lure of the oil game was too strong to overcome.” He founded the Pawnee Bill Oil Company on February 25, 1918, and bought Petrol Refining’s new “skimming” refinery in March.

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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, refineries built west of the Mississippi River often used the inefficient but simple process.

portrait of Maj. Gordon W. "Pawnee Bill" Lillie.

Maj. Gordon William “Pawnee Bill” Lillie.

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 extolled that “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.”

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. By 1921, most 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 downtown scene during Pawnee Bill Oil company days

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,” added the Kansas newspaper. “Many of the Independent refineries have been sold at receivers’ sale. The financial condition of the Pawnee Bill company is in fine shape.”

What happened next remains a mystery since financial records of Pawnee Bill Oil Company are rare, but a 1918 stock certificate signed by Lillie is valued by collectors (it can be found online selling for about $2,500). Lillie’s Wyoming friend Cody also formed several oil exploration ventures, including the Shoshone Oil Company.

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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 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: “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 22, 2021. Original Published Date: February 24, 2017.

 

 

Not a Millionaire from Old Oil Stock

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.

Palmer Union Oil Company 1924 stock

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…)

New England-Texas Oil Refining Syndicate

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.

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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.

 

Gas, Oil and Developing Company

The gas that wouldn’t burn: A University of Kansas professor extracted helium from a natural gas well in 1905.

 

Drilling for natural gas in May 1903, an exploratory well of the Gas, Oil and Developing Company found helium on William Greenwell’s farm near Dexter, Kansas. The discovery came at a depth of just 560 feet as the company drilled into a geologic formation that produced “a howling gasser” flowing an estimated nine million cubic feet of natural gas a day.

(more…)

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