THE HISTORY OF GEOPHYSICAL PROSPECTING
PART FOUR - VISCOUNT COWDRAY

Chapter 11  -  The Mexican Eagle Oil Company

On his way from Mexico City to New York in April of 1901, Weetman Pearson missed his train connection at Laredo, Texas. With nine hours to wait for the next train to New York City, he put in the time talking with some oil prospectors about the Lucas gusher which two months before had been brought in as the gigantic discovery weIl of the SpindIetop oilfield near Beaumont, Texas. Greatly excited by what he had heard, Pearson telegraphed Mr. J. B. Body to secure an option on all the land he could acquire in the neighborhood of San Cristobal on the Isthmus of Tehuantepec, where Pearson knew of the existence of a large oil seep.

The Mexican Eagle Oil Company was formed to handle the Pearson oil properties. Five years passed with little to show for the Pearson petroleum endeavor in Mexico. A few small producers in what came to be known as the San Cristobal-Capoacan oilfield was the total production of the Mexican Eagle Oil Company. This field was never to prove a satisfactory source of crude oil.

Far from discouraged by the meager beginning, Pearson in 1906 obtained concessions from the Federal Government of Mexico and from the governments of the States of Vera Cruz, San Luis Potosi, Tamaulipas, Tabasco and Chiapas for some exclusive rights and some preferential rights to explore for oil on the national, state and vacant lands within those states. Pearson had set up a selling and distributing agency in England, which had to be supplied with refined products. To this end Lord Cowdray began the construction of an oil refinery at Minatitlan which was finished in 1908. In 1909, no satisfactory production having been located in Mexico, the firm had to buy most of its crude oil supply from Texas to keep the refinery going, even at the reduced rate of 3,000 barrels daily.

On September 23, 1908, Weetman Pearson had purchased the Cowdray Estate of some 9,000 acres in Aberdeenshire for the sum of 340,000 pounds. This purchase plus continued heavy expenditures in the Mexican petroleum adventure began to weigh heavily on Lord Cowdray's mind.

 A letter written to his wife from Mexico City on February 24, 1909, was full of gloom. Pearson said in part:

 "l am slothful, and horribly afraid of two things - first, that my prjde in my judgment and administration should be scattered to the winds, and secondly, that I should have to begin life again. These fears make me a coward at times. l know that if my oil venture had to fizzle out entirely that there is enough left for us to live quietly at Cowdray.“

Eight years had gone by since Pearson had made his first expenditure in the oil business. His investment had now risen to a staggering total of twenty five million dollars, with no indication whatsoever that he and his associates were about to make their first important discovery. Two thousand miles away Everette De Golyer, the answer to all of Weetman Pearson's hopes and prayers, sat quietly in a classroom at the University of Oklahoma, studying geology.

Dr. C. Willard Hayes, chief geologist for the United States Geological Survey, had met De Golyer while "De" was doing summer field work for the USGS ln the Big Horn Basin of Wyoming in 1907. In April of 1909, Dr. Hayes was secured by the Mexican Eagle Oil Company, Ltd., as Chief Geologist. In his new position, Dr. Hayes had contracted to stay in Mexico two months out of every year. Dr. Hayes felt that young De Golyer possessed a knack for discovery and a nose for oil. Hayes invited De Golyer to join him as a petroleum geologist in Vera Cruz for the Mexican Eagle.

In a few months Pearson as weIl as Hayes considered De Golyer the brightest star in the oil exploration department. The first three wells of the Petrero del Llano oilfield had been small. Everette was assigned the task of deciding upon the location of weIl #4. On December 27, 1910, Petrero #4 blew in making 110,000 barrels of oil per day. This weIl has produced more petroleum than any other single weIl in the history of the oil business.

Little wonder that Lord Cowdray called De Golyer his "lucky charm" and insisted on Everette finishing his education at Pearson's expense. De Golyer was graduated in June, 1911, from the University of Oklahoma with the degree of B. S. in Geology. Upon his return to Mexico he found the position of Chief Geologist waiting for him. Willard Hayes had been moved up to Vice President of the Aguila Oil Company (Mexican Eagle) and had assumed a number of administrative duties. Dr. Hayes had resigned from the USGS to accept the Vice President's job.

In 1912 Everette Lee De Golyer was credited with the discovery of the prolific Naranjos oilfield in the Golden Lane. In the same year he took over the newly organized land department and thus beeame the head of both the geological and land departments for the Mexican Eagle.

Nothing succeeds like suceess and the period 1910-1912 was as bright and sunshiny for Weetman Pearson as the previous nine years had been dark and foreboding. Even the bitter opposition of the Waters Pierce Oil Company to Lord Cowdray's oil ambitions in Mexico was to have its cheery chapter in 1912. When Pearson embarked on his oil business in Mexico, the Waters Pierce Oil Company, owned one third by Mr. Henry Clay Pierce and two-thirds by the Standard Oil Company, had for thirty years enjoyed a monopoly of the retail oil trade in Mexico. Prices were excessive and the Company had realized a near two million dollar profit in the year 1908. Under these circumstances it was scarcely surprising that Waters Pierce should look askance at the appearance on the scene of an Englishman of Pearson's known capacity, resources and unique position in Mexico. Mexican production was needed and Pearson would have been welcomed had he come solely as a producer of crude oil. But when he approached Henry Clay Pierce with the announcement that he was going to undertake both production and distribution, the result was trouble and more trouble.

The years 1905-1908 witnessed a number of conferences which had had in view the amalgamation of the Pearson interests with the Waters Pierce Oil Company. The negotiations came to a halt after three weeks of confrontation between Mr. Pierce and Mr. Pearson in New York City in January of 1908. Weetman Pearson contended that his extensive concessions in Mexico entitled him to a fair share (a half interest which he agreed to whittle down). Pierce was interested in an amalgamation only if Waters Pierce received the lion's share but he feIt that stalling for time was better than making this position clear. The attempt to arrive at a contract, never taken very seriously by either Mr. Pierce nor by Judge Priest, representing Standard Oil, resulted in a deadlock. Lord Cowdray eventually ended the stalled negotlations by a cable to Pierce from London. He at the same time cabled his Mexico office to start preparations at once to enter into the retail business in competition with the Waters Pierce Oil Company. A price war was inevitable; a price war which Pearson was sure to lose if he did not come up with some prolific production of his own in Mexico within two or three years.

Henry Clay Pierce was not content merely to have the upper hand in a price war. Press attacks upon Pearson and the Aguila Oil Company appeared simultaneously in Mexican, American, French and even in English newspapers. The object of the derogatory journalism was apparently to scare away possible investors and supporters of the Mexican Eagle Oil Company. In addition to these press attacks, Pearson and his colleagues were shadowed by detectives. His telegrams, or copies of them, were intercepted and read. As time went by, the Standard Oil Company seemed to have developed considerable misgivings about the Pierce tactics. In the summer of 1910, Standard emphatically denied in the London Daily Mail that the detectives who had been shadowing Pearson in New York City had been hired by them. In the fall of 1910, reliable information reached Lord Cowdray that the officials of Standard Oil ''were not on speaking terms" with the officials of the Waters Pierce Oil Company.

Standard's Chairman apologized to Pearson for the manner in which the Waters Pierce Oil Company had conducted its campaign and asked Lord Cowdray to believe that the Standard Oil Company dissociated themselves with it. In 1912, the Standard Oil Company's Directors formally buried the hatchet by giving a Dinner in Pearson's honor in New York at which Mr. J. D. Archbold, Mr. A. C. Bedford, Mr. W. C. Teagle and Mr. John D. RockefeIler, Jr., were included among the guests.