by Paul R. Spitzzeri
A Los Angeles Times newsletter from last week discussed, among other pressing climate change issues, the question of abandoned oil wells near national parks, with one location cited being the Santa Monica Mountains National Recreation Area and the fact that there are over 5,700 “orphaned” oil and gas wells within thirty miles.
This includes the earliest oil field in greater Los Angeles, the San Fernando, which was centered in the hills west of today’s Interstate 5 in Santa Clarita and where F.P.F. Temple was among the busiest prospectors there during the region’s first major period of growth and development in the first half of the 1870s (the first well was drilled in Pico Canyon in 1865). The failure of his Temple and Workman bank in early 1876 as he was apparently on the cusp of possible success was soon followed by the Star Oil Company’s nearby gusher that really inaugurated California’s oil industry.
Four decades later, Temple’s son Walter was the extraordinary beneficiary of large deposits of petroleum on a 60-acre property near Montebello which he grandiosely called “Temple Heights” and which was owned by F.P.F. before the bank collapse and the subsequent loss of the land to Elias J. “Lucky” Baldwin. After Baldwin’s death in 1909, his heirs, daughters Anita and Clara, took possession of the property, but estate executor (and their cousin) Hiram A. Unruh decided a few years later to sell this small tract to Temple, who couldn’t afford to buy it outright, so a financing plan was arranged.
In spring 1914, Temple’s oldest child, Thomas, was playing with friends on the hillside above the family’s home and rushed home breathlessly to tell his father he’d found oil. A lease was executed the next year with Standard Oil Company of California, now Chevron, and, not long after a Baldwin test well was successfully brought into production just a short distance away, the first Temple well was drilled. It, too, was a producer when completed in late June 1917, just after America’s entry into the First World War and as automobile production and use continued to climb.
Over the next several years, the Temples realized a small fortune from their Montebello lease and Walter sought to duplicate its success by forming his own company and prospecting throughout greater Los Angeles, including Whittier, Huntington Beach, Signal Hill and Ventura, and elsewhere, such as in Mexico, Texas and Alaska. It is not believed he had any drilling sites in nearby Santa Fe Springs, which exploded onto the oil prospecting scene in the early 1920s and quickly became a hugely productive field.
Tonight’s highlighted artifact from the Homestead’s collection is the 6 July 1923 edition of the Santa Fe Springs News, launched just the prior year when the field was opened, and which, not surprisingly, is almost completely dedicated to the frenzied oil seeking activity going on there. One of the main front page articles is headlined “Santa Fe Field Greatest Of Them All” and it reported on a recent statement made by the state’s Chamber of Mines, noting “that the potential possibilities of the Santa Fe Springs oil field exceeded those of any other field in Southern California.”
It was added that
the exact date for the peak of production to be reached in Santa Fe Springs is not known or can be judged while that of Huntington Beach [another relatively new high-production field] in the opinion of the oil statisticians has been passed and unless new territory is opened at Signal Hills [the peak?] has been passed in that field as well
With assessments guessing that Huntington Beach would hit its apex in August or Septemeber and Long Beach/Signal Hill in the dog days of the eighth month, it was asserted that “there seems to be no question in the minds of producers that the potential production of Santa Fe Springs is the greatest of the three fields.” How careful producers were in handling productive wells and minimizing waste, a big problem in many cases, was critical.
The article ended by noting that, at the end of May, almost 70 million barrels of oil were in storage throughout California, while there was available or soon would be due to construction enough space to store another nearly 40 million. It concluded with the observation from the chamber that “if available storage is not filled at a greater rate than now sees praticable, and if the producers keep their heads and do not get panicky,” a peak of production could come and go without any cuts in crude oil prices.
There was, however, great consternation in Santa Fe Springs regarding an interview that H.C. Allen, a lawyer and financier gave to his hometown Salt Lake Telegram newspaper in Utah’s capital city and which, it was averred, he was given to “condemning the entire Santa Fe Springs field because the well in which it is understood he was interested was not deepened.” Purportedly, Allen insisted that 80% of all wells drilled there had salt water in them and that some of the best producing wells were being shut off because of problems with this water and he also asserted that there was over-production and too much development causing this issue.
The News fired back that “Mr. Allen failed to look into the matter thoroughly or that he was ill advised” given the Chamber of Mines statement cited above. Moreover, the paper continued, “it [the field] is generally known and credited by all men with being the greatest high gravity oil field in the world, producing in excess of 260,000 barrels of 35 degree gravity oil daily under a curtailed program.” Long Beach was yielding some 225,000 barrels and Huntington Beach about 150,000 by contrast.
In addition, a journalist for the sheet checked out the claims of water problems “and it was learned that casing trouble and bad shut offs had caused trouble in five wells in the field but that in no case was the condition of the sand, the cause of the difficulty.” An unnamed “public official” was quoted as saying that state statistics would be sent to Allen “and it is hoped that impressions received will have been corrected at that time.” This individual concluded by stating “that any one with smallest degree of technical knowledge could inspect the three great fields of the Southern California district and fail to appreciate the greatness with the hundreds of thousands of barrels of oil gushing from the wells, is almost un-understandable [!].”
A third major article trumpeted the assertion “that production in the Santa Fe Springs high gravity oil field will reach 300,000 barrels per day by August 15” with the citation that there were seven new wells brought in during the past week with almost 40,000 barrels among them, while the week prior, another ten yielding some 60,000 barrels were brought into production. Not only that, but the 300,000 figure was believed to be conservative.
The piece went on to report that
Extra gangs of men are working in all directions from the center of production placing pipe lines, building refineries and in many cases building new derrick[s]. Fourteen new wells were added to the list of drillers last week and permits registered since Thursday number four. It is claimed that 51 wells are drilling below 4400 feet, the depth at which the Meyers sand [a benchmark] is usually touched. The majority of these wells are in the proven arc of the field.
After listing the many wells involved in recent activity, including two from C.C. Julian, who went on to notoriety for his stock schemes that led to a disastrous crash in spring 1927, it was noted that “although no official abandonments have been listed it is generally admitted that several wells have stopped development work.” Wildcats, or geologically unproven, wells were “discontinued because of the limited findings of commercial indications,” but the field’s producing boundaries were yet to be determined.
The last major feature concerned a “novel plan” by the Pacific Royalties Company, with writer Roy W. Macy, the Los Angeles representative of the News, noting that “when an oil company leased land for drilling they give the land owner a cash bonus and, in addition, agree to give him a certain pecentage of all the oil produced.” The percentage varied, usually being an eighth (this being the rate paid to the Temples for their Montebello Field lease), though sometimes it could be as high as a quarter or even 30%, but some owners sold a percent or two for cash.
What the new company proposed to do was buy royalty percentages with investors paying $100, $500 or $1000 per share. These shareholders, in turn, “share equally . . . in the profits from these royalties” and if the profit was 50% or higher, dividends were to be paid. Preferred stock in the company had a par value of $100 and voting rights, was to pay 7% interest, and a quarter of the profits was to go to a fund to be used both for reserves and to buy more royalties. A further half was to go to the preferred stockholders at each dividend period, while the remaining quarter went to common shareholders. One preferred stockholders were paid up, that stock became common and the scheme was promoted as a safe way for a small investor to get into the oil game.
Among those who were targeted for customers were “the boys from the fields” and Macy claimed that the main officers, President George A. Nicholls, said to have much experience in “the larges producing and supplying companies in the United States;” C.V. Kissinger, a former oil well supply company purchasing agent; and Harry B. Dresser, an office and credit manager for the same supply firm, “are just the same fellows inside” even if they “white collars instead of hickory shirts.”
A good many short news items, as well as a “Drilling Report,” showed the heightened level of activity at Santa Fe Springs, inclding a good many long-forgotten companies like the Hamilton, Superior, Amalgamated, Foster, Cecelia and Globe firms. Others, however, still exist, such as Union and Shell, while famous ones like George F. Getty (whose son, J. Paul, turned the firm into an international giant making him the wealthiest person on the planet at one point) and infamous examples like Julian, were also busy.
The “Field Notes” section contained some notable items, including the fact that Telegraph Road. the main route from Los Angeles through Santa Fe Springs to Orange County and the precursor to Interstate 5, was closed for repairs that meant a project “virtually to bulid a new highway. Also mentioned was that Jonathan S. Dodge, formerly the state bank examiner and, before that, the chair of the Los Angeles County Board of Supervisors, was getting into the oil game through his La Cal Oil Company at Hermosa Beach and he was being joined by former federal tax collector Rex Goodcell. Finally, it was observed that the Long Beach field celebrated its second anniversary (its inaugural well was Shell’s Alamitos #1, brought into production on 24 June 1921) by pushing above 200,000 barrels per day in production.
Elsewhere, it was reported that a recent shipment of 3 million barrels of crude in forty tankers leaving Los Angeles Harbor over a week recently constituted a new record. In fact, it was stated that “the six days’ business was nearly 700,000 barrels in excess of the tanker shipments for the previous seven days” and that this considered enough “to practically take care of the entire oil production of the state for a single day.” More than 6% of that total shipment came from Santa Fe Springs.
There was a rumor that Sinclair Oil, one of the nation’s biggest oil companies and controlled by Harry Sinclair, a close friend of Secretary of the Interior Albert B. Fall, was going to make a big splash in the local scene, including at Santa Fe Springs. It was said representatives were in the area studying deep well drilling techniques in preparation for the “invasion.” Sinclair and local oil mogul Edward Doheny were, in fact, already well connected with Fall, specifically secretly working on leases at national reserves which involved “loans” provided to the secretary from his friends. Later, the Teapot Dome Scandal burst forth and more can be read about that in posts from this blog about Doheny’s 1926 trial and on Fall and his stay at the Las Encinas Sanitarium in Pasadena.
A number of ads are also of interest, including ones pertaining to other oil royalties companies, oil land sales, stock sales, and many others. One that stands out is for the Stoody Welding Company, formed a couple of years earlier in Whittier by a father and his two sons, who built their business making a variety of parts for oil field workk including disc bits, bushings, sprockets, gear teeth, blades and others. Later, however, Shelley, one of the sons, patented a powerful alloy drill bit that allowed for far more durable drilling and which made him a fortune. He owned a large house in North Whittier (Hacienda) Heights and then one in Palos Verdes Estates, from which he commuted to Whittier by helicopter. Stoody also had a cattle ranch in Carbon Canyon in modern Chino Hills where he kept a small plane, but in 1961, he crashed trying to land on his ranch, killing himself and two passengers, with an investigation determining that Stoody was drunk.
This newspaper and other issues of it are very interesting and informative about Santa Fe Springs and the region’s oil industry broadly, though the contrast between the headlong rush for prospecting a century ago and the long-term consequences of what the industry has entailed since becomes greater as climate change worsens, even as local fields gradually close and those “orphaned” wells continue to be a major issue.