Tuesday, May 12, 2009

The Rich Hill Oil Company

The history blog tonight tells the story of Rich Hill's potential oil. The story was written by Miss Mary Griffin in the January 28, 1982, Wagon Wheels addition to the Rich Hill Mining Review. The following is Part I of the story. Part II will be tomorrow night's blog.

While browsing through a box of old newspaper clippings at the Memorial Library, I ran across some materials on the Rich Hill Oil Company. In the 1920's this company was organized as the Units Oil, Gas and Development Company by a group of businessmen, cattlemen, farmers and landowners. I thought this might be interesting since today the L.M.B. Leasing Company Incorporated of Paola, Ks. has leased some five thousand acres in approxima­tely the same area for the purpose of drilling for oil. In addition to this, another company had made some leases northwest of Rich Hill for the same purpose.The purpose of the Rich Hill Oil Company was to develop the oil prospects of this locality. The United States Geological Survey and the Missouri State Geological Department had made favorable reports on the possibility of both deep and shallowproduction of Oil. A one hundred-sixty acre tract of land between Rich Hill and the" state line had been drilled by a local company and had found five wells producing at one hundred twenty-six feet and drilled by an ordinary well drill. The plan had been that when enough wells had been drilled and were producing, a small..pipe line would be laid to a nearby railroad. Then a pumping plant would be installed to market the oil.

The following reasons were given for believing that we were in an oil producing area:
l. The formations known to be oil and gas producing in Eastern Kansas (especially Linn and Bourbon Counties) extend into Vernon, Bates arid a part of St. Clair Counties in Missouri.
2. These sediments contain sandstone, shale and some limestone that can serve as excellent deposit ones for gas and oil.
3. The Rinehart (Henshaw) well near Rich Hill was drilled to a depth 1870 feet. In the record there were a number of good showings of oil and gas in the Mississippi Lime.
4. Further explorations on the proven structure was expected to discover commercial production possible in Bates and Vernon Counties.
5. An oil sand was found in the number two. Morrow well in Vernon County at a depth of 1800 feet.
6. Both oil and gas had been found in the Richards and Stotesbury wells.
7. The coal fields, the presence of natural gas andthe presence of oil in every well gave hopes of quantities of oil.
8. For years there was a seepage of oil in the river where the leases were located (Marais des CygnesValley). The oil bubbled up in the river at any time of the year, and there was enough that it could be dipped up and lighted.
9. For years Rich Hill was the only town that burned gas produced in the state. These wells were drilled to a depth of three hundred feet, and all had a showing of oil in them.
At the start a number of Bates County people got together and decided to make a thorough search for deep oil. They organized with a Board of Trustees to be elected annually, and they in turn would select the officials and managers. Among the names listed as Trustees and Officials were the following:
Frank A. Strickland, president and judge of the Southern District.
C. F. Lane, first vice-president, owner with Mr. Strickland of the Lane and Strickland three thousand acre Stock Ranch and several improved farms.
Dave McCombs, second vice-president, coal operator and landowner.
T. W. Robertson, third vice-president, invest­ments, and large landowner here and in Louisiana.
W. W. Jamison, secretary-treasurer and officer in the Farmers and Manufacturers Bank with which he has been associated for sixteen years and a Mayor of Rich Hill.
S. M. Davis, Trustee, associated with the com­mercial Bank and owner of several large farms.
George B. Dowell, Trustee, Secretary of the Beasley Mercantile Co. Acre of the most successful mercantile firms here.
Charles J. Klumpp, Trustee, secretary of the Kreiger-Klumpp Ice Manufacturing Company and a large farm and city property owner.
R.N. Montgomery, president of the Commercial State Bank.

Robert Thompson, large owner of Bates County farm lands.
J. F. Kern, one of the largest owners of improved farm lands in Bates County.
The Company hired a man at a daily wage plus expenses to secure leases. He appealed to the land­owners to make leases without cost to the company. The result was a block of over 20,000 acres in leases. In the event that deep oil was found, the landowners would get one-eighth royalty which would make a handsome profit.
The form of organization was known as "Common Law" or "Declaration of Trust." There were no promotional shares and every share owner paid cash for his shares. The officials, managers and trustees were to serve without compensation. The shares were to sell for ten dollars each, and each subscriber was to buy, a unit worth One hundred dollars. The plan was to sell six hundred units. When $60,000 had been subscribed, a standard drill, tools and casing were to be pur­chased two test drills were to be made as soon as the geologist chose the most favorable place and weather permitted. When four to six test drills had been successful, the price of the shares was to be raised.
A strong standard drill, a string of tools and casingwere purchased for $15,000. A local man was to be the driller.
This quote is taken from one of the brochures: "We do not claim this an investment. It is a chance pure and simple. But with our large acreage and smalj capital, we think it offers the biggest gamble you ever were offered a chance to get in on. We do not want anyone to go in with us who does not feel willing and able to lose the amount put in, for it is simply a matter of whether or not we strike oil. If we don't, your money is gone; but, if we do, it will make you the largest returns on the amount that you ever invested."

The rest of the story will be posted on tomorrow night's blog!

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