Only on occasion does a single event characterize the entire economical future of one state, but in Texas that occasion was on January 10, 1901. That occasion was the Lucas #1 at Spindletop, near Beaumont, Texas. It changed cotton and cattle domination in Texas, into an oil and gas power house of the twentieth century.
Before the 1901 Spindletop well, Texas only experience with oil and gas was in Corsicana in 1894. That happened when the city of Corsicana drilled a few water wells at a depth only 1027 feet and the oil boom was on. The small town of Corsicana, (Just south of Dallas, Texas) became the first Texas Oil Boomtown.
The first well in the Spindletop Field was the Lucas #1 and was it a well. Unbelievable! This well blew oil and gas out for nine days before it was capped. I have been in the oil and gas business for a long time and I have never heard of any well, anywhere, produce these type of production numbers: 100,000,000 Barrels of Oil per Day. Are you kidding me. If we had a well today that produced those kind of daily numbers, that well would generate $9,000,000.00 dollars per day or $270,000,000.00 per month. The direction of the Texas economy had been defined.
The city of Beaumont went from a small town of 9,500 citizens to 50,000 plus, by the end of the year in 1901. Hundreds of oilfield contractors came to the area, many from Pennsylvania. The search for oil extended to the gulf coast. The next big discovery came in 1903, in the Sour Lake area of East Texas. This area was much different than the Spindletop area. Sour Lake was swampy and large wooded thickets. Almost impossible to navigate. Also, there was a danger that was much more significant in this area: Hydrogen Sulfide Gas. This gas was very hard to detect and many workers died. Today, we have very sophisticated equipment to signal it’s presence.
The next spectacular oil discovery was in Batson, Texas. This area was even more remote and marshy. This was a much more lawless area of Texas. Baston was basically a post office and nothing else and overnight it became a tent city of oilfield workers and soon had over 30 saloons and houses of prostitution. Gambling was the recreation of the day. In 1904 the Texas Rangers were called into the area to take control of the lawlessness.
The next big discoveries were in the northeast part of East Texas. Kilgore, Longview, Henderson and Gladewater. By 1931, there was a huge amount of drilling in all of East Texas. These were the early days of the Great Depression and workers from all over the country flocked to this area. By 1935 these fields were being over-produced. Today, we still drill new wells in this area and re-work old abandoned wells that didn’t have the technology we have today as far as “second stage recovery techniques.”
The most popular formation was the Woodbine Sand. I have a lot of experience drilling in the Woodbine. A sand formation that produces “Texas Sweet Crude.” The best oil in the world and serves as the benchmark for oil prices. It has very low sulfur content and greatly reduces the cost of refinement. In the early days of drilling, wells were drilled with cable rigs. Rotary drilling technology was basically invented and applied in this East Texas area. ” Wooden derricks “became “steel derricks”. Many of the rotary drilling methods that were invented in East Texas, are still used today. East Texas was a pioneer in drilling technology that we use all over the world today. East Texas provided almost all of the oil we used in World War II. There are still Cable Tool Drilling Rigs today, but they have very limited application and are used at very shallow depths.
In the following decades, almost all areas of Texas opened up for oil and gas drilling. I grew up in Odessa, Texas and the Permian Basin area became one of the biggest producing areas of Texas. My family are third generation oil and gas workers. My father is 83 years old and has drilled over 3000 oil wells across the world. He still works everyday and builds drilling rigs in Houston, Texas. Texas has produced more oil and gas than any other state in the U.S. and is still today, the biggest oil and gas producing state.
This gives you a little history of East Texas Oil and Gas Production and the significant effect it had on Texas and our economy. We are still discovering new oil fields in this state today. The Barnett Shale was a huge discovery in the north part of Texas. The Eagleford Shale in West Texas has been a recent discovery. We have better technology today when it comes to finding oil and gas hydrocarbons. 3D Seismic was revolutionary in drilling for deeper oil and gas producing zones.
My expertise has been drilling wells and venture capital. Investing in Oil and Gas Wells has been a part of this business for a hundred years. Brokers, Landmen, Geologist, Mineral Rights Owners have been selling oil and gas working interest since the first well was drilled in East Texas. In the beginning, until 1933, interest in wells were sold as “Shares,” or “Stocks.” Pretty dicey stuff. Oil and Gas Investments were regulated for the first time with the “The Securities Act of 1933.” The Securities Exchange Commission, were now in charge of oil and gas investments. Eventually, most oil and gas investments became non-registered (Regulation D Offerings.) There are some fully registered oil and gas investments, such as Master Limited Partnerships, which are expensive and time consuming to register.