THE HISTORY OF GEOPHYSICAL PROSPECTING
PART THIRTEEN - PURE

Chapter 38  -  Acquisition by Purchase

With its score of large cities, the state of Ohio was in need of sizable amounts of gas for heating, lighting and cooking. In the capital city of Columbus in the year 1846, the Columbus Gas, Light and Coke Company was organized to manufacture gas and supply it to the city. Later in the nineteenth century natural gas was discovered in the Trenton limestone and was found to be productive over a wide area of the state. Columbia Gas acquired its share of the natural gas and in 1906, changed its name to The Columbia Gas and Fuel Company. Liquid petroleum had been discovered accidentally, along with the gas in the Trenton. Petroleum was a minor product of The Columbia Gas and Fuel Company, which on April 21, 1914, was expanded into The Ohio Cities Gas Company.

Early in 1918, The Ohio Cities Gas Company bought out an eastern company called the Pure Oil Company of New Jersey for a price slightly in excess of twenty two million dollars. In March of 1919 the Pure Oil Company of Ohio was organized und in June of 1920 had acquired the petroleum properties of The Ohio Cities Gas Company. The Pure Oil Company's first substantial petroleum property had been in the Cabin Creek oilfield of West Virginia. They had purchased oil and gas leases in the area in 1913. In January, 1915, Pure had brought in the discovery weIl on Cabin Creek; it was the Williams Coal Company #1. Production was from the depth of about 3100 feet in the Berea sandstone of Cretaceous Age. The Cabin Creek region was mountainous and the material for the first wells was hauled in by teams of oxen.

On November 25, 1916, Pure bought the producing properties of the Southwestern Petroleum Company for five million in cash. There were nearly 7000 acres of producing oil and gas leases in Oklahoma, split about equally between the Healdton oilfield in Carter County and the Cushing field of Creek County and Payne County. Some wildcat acreage in Oklahoma was also included in the deal. To house its rapidly expanding Oklahoma Division, Pure erected an office building in 1917 in Tulsa, at the corner of Fifth and Cheyenne Streets.

In 1922 Pure organized the Orinoco Oil Company in Venezuela. In order to operate in the country, various individuals and interests within Venezuela had to hold 25% of the stock of the company; Pure held the other 75%. The total capitalization was ten million. The company held valuable oil concessions on Lake Maracaibo.

In 1924, Pure Oil Company came into possession of the assets of the Oklahoma Producing and Refining Company for about nine million dollars. The producing propertics of this company were located principally in the Osage country and in the Okmulgee-Muskogee area. Another asset of the Oklahoma Producing and Refining Company was the Muskogee Refining Company. Pure already owned a number of refineries of which the more important were the Cabin Creek Refinery in West Virginia; the Ardmore Refinery in Ardmore, Oklahoma; the International Refinery in Cushing, Oklahoma; the Cornplanter Refinery in Warren, Pennsylvania, and the Heath Refinery near Newark, Ohio.

Mr. Beman G. Dawes was President of The Ohio Cities Gas Company and of its successor, the Pure Oil Company from 1914 to 1924. He was Chairman of the Board from 1924 to 1947. Henry M. Dawes was President of the Pure Oil Company from 1924 to 1947. In 1947, B. G. Dawes and Henry M. Dawes retired to the Executive Committee of which Henry M. Dawes was the Chairman. Rawleigh Warner became Chairman of the Board and L. S. Wescoat became President in the year 1947.

When oil was discovered in the Smackover field in Union County, Arkansas, on July 31, 1922, the Pure Oil Company had a substantial leasehold in that play. At the same time, Pure was in the process of acquiring producing properties in the neighboring state of Texas. The Humphreys Mexia Oil Company and the Humphreys Texas Oil Company were producing petroleum in four Texas counties, Limestone, Navarro, Kaufman and Titus. The oil was from the Woodbine sand, trapped along the Mexia Fault of East Texas in the Mexia, Currie and Powell oilfields.

Late in 1921, the Pure Oil Company agreed to pay the Humphreys companies six million dollars for a one-third interest in the Humphreys Texas Oil Company and a one-eighth interest in the Humphreys Mexia Oil Company. On March 1, 1924, the Pure Oil Company purchased the remaining stock interest in the two Humphreys cornpanies for a consideration of close to forty million dollars. On April 1, 1925, Pure also gained control of the Humphreys-Boyd Oil Company and its producing properties in the nearby Wortham oilfield for five million. In the same general period, the Smiths Bluff Refinery, together with the associated terminal and tank farm became Pure property. Smiths Bluff Refinery is situated eight miles south of Beaumont, Texas, on the Neches River. It has access to deep water and ocean-going tankers and is also served by the Kansas City Southern Railroad.

A brand new policy for the Pure Oil Company had its birth at the Director's Meeting in 1925 at the home office in Chicago. In the ten years just passed the company had spent close to a hundred million dollars, paid mostly in cash, for its petroleum holdings plus the necessary refineries, pipelines and marketing facilities that went with the oil properties to make the Pure Oil Company an integrated company. Mr. Comer Plummer, Vice President for Production, was of the opinion that the time had come to discover future oil production rather than to purchase it. He proposed the enlargement of the geological department. Theron Wasson had joined Pure as Chief Geologist in 1922 and was to provide excellent leadership in Chicago until his retirement in 1955. Ira Higgins Cram had been secured for the head geologist in the Tulsa office in 1924 to take charge of the Mid Continent Division. Cram served in this capacity until 1947, when he became Manager of Exploration for Pure. He resigned this position in 1949 to become a Vice President of the Continental Oil Company. The other Directors were enthusiastic about Mr. Plummer's suggested new policy and authorized him to go ahead with his plans. The first move was to send young geologist Donald M. Davis to Houston to form a geological departrnent and to "Whip the Gulf Coast." Davis arrived in Houston in the summer of 1925.

No story of earth science exploration would be cornplete without at least a glance at the cloak-and-dagger episades in the profession. Perhaps more important, as a permanent record, is a presentation of the ethical and legal aspects of the use of classified technical information for the financial benefit of the individual. Since the Pure Oil Company was to figure in two of the earliest episodes, this would seem to be as good a place as any for such an interlude.

The German seismograph parties in the year and a half that they were alone in the field, employed guards armed with shot guns with instructios to shoot anyone who approached the tents in which the mechanical seismographs were set up. These armed guards were also used for the purpose af making sure no one stole any part of the equipment. Other companies did scout the Germans but usually with the aid of a pair of binoculars and at a safe distance.

When seismic operations became widespread in 1926, scouting by other companies became a general practice. Each seismograph party became accustomed to having scouts watch its activities and follow the crew into the field. Four, six and even a larger number of rival oil companies would have their scouts covering the operations of a particular seismic crew. One enterprising party chief worked out a deal with the scouts whereby they dug his shot holes in exchange for being furnished regular progress report maps of shot points and recording locations.

Most party chiefs, however, insisted that the scouts stay at a safe distance and out of voice range from units of the field party. When at work on a hot prospect false shots were sometimes taken and all sorts of dodges invented to leave town when the scouts were asleep. Often the rival scouts would band together and divide their duties. In such cooperative enterprises, one of the scouts would always be on duty haunting the hotel lobby, night and day, so as to report on all comings and goings of seismic personneI. One geophysical party chief invariably used the back stairs for ingress and egress; being seen by the hotel clerk only at registration and checking out.

In the early 1920s, the Marland Oil Company and at least two other producing companies worked out plans by which their geologists, along with other key personneI, would purehase stock in a subsidiary company buying oil and gas royalties in favorable areas. Other oil companies that had no such royalty company for employee participation, made no objection if their geologists acquired royalty holdings. Still other oil companies, the majority of oil companies, had a rule against employees buying any kind of oil property or interest. With the dawn of the Great Depression in 1929, oil company policy in general turned against the idea of geologists buying royalties, partly because the various oil companies began to buy protective royalties and mineral interests in promising areas rather than to undertake the burden of paying annual lease rental payments at a time when cash was so scarce.

In the middle 1920s, an earth scientist associated with Pure, hired a lease man to buy him some royalty interests in a favorable area, after extracting a promise from the lease man not to engage in lease buying on the prospect. The lease-broker was not a man of his word; he bought the leasehold in this territory and charged the Pure Oil Company tripIe the customary price to acquire the acreage from him. The Pure Oil Company was naturally disturbed and angry about the incident but they took no legal action.

A few years later a Pure geologist did everything he could to interest his company in what he considered to be an excellent geological and geophysical play. He even went to the trouble of making a personal appeal to Vice President R. W. McIlvain, but Pure could not be induced to lease the property. The geologist resigned his position with Pure and took his idea elsewhere. He succeeded in having the area leased and drilled. A major oilfield was the result. The Pure Oil Company again failed to take legal action. In the early 1930s a somewhat similar situation developed within the Atlantic Refining Company without legal incident.

In the early days of the Depression flagrant violation of confidence took place both within the Shell Oil Company in Houston and the Amerada Petroleum Corporation in Tulsa. Shell suffered not one but aseries of leasing reverses. Each time the Shell lease man would move into an area to start his activities, he would find that a Canadian lease-broker had preceded him by one, two or more days and that a considerable portion of the choice leasehold had been bought. Private detectives were set to following the movements of some of the key exploration personneI. After weeks of sleuthing, there was no hint of where the leak was coming from. An attorney from outside the …

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