“Oil! Oil! Buy now, while you have the chance”:

The Chino Valley Oil Boom

By Erik Berg

 

Yavapai County was founded on mining booms. Prescott got its start with the Bradshaw Mountain gold discoveries of the 1860s and Jerome brought the region into the industrial age with its rich copper deposits. Even after most of the mines have closed, the by-gone era of prospectors and pick-axes is still an important part of the area’s history, culture and landscape.

But few Arizona residents realize that Yavapai County was also the scene of one of the southwest’s great oil rushes and once heralded as America’s next great oil field. Given the promising geology and other proven mineral deposits, it was perhaps inevitable that Yavapai County would become a target for oil prospecting and even a little surprising that it took as long as it did.

But when the oil craze finally did come to Yavapai, it came with a vengeance.

Unlike gold and silver which had been mined and studied for thousands of years, oil prospecting was a relatively new endeavor that started with the world’s first oil well near Titusville, Pennsylvania in 1859. Through the latter part of the nineteenth century, alternating cycles of over-supply and over-demand pushed oil prospectors westward where they discovered new fields throughout the mid-west and later Texas, Oklahoma and California. By the early years of the twentieth century, geologists had recognized that oil was typically associated with sedimentary deposits like sandstone and shale and was sometimes trapped and concentrated by folds in rock layers called anticlines. But beyond these and a few other basic observations, oil prospecting was a hit-and-miss proposition guided as much by luck and superstition as by science. The geology of one area might look a bit more promising than another, but when oil was in high-demand just about any unexplored region held a glimmer of possibility.1

Throughout the 1800s, Arizona’s isolation and limited transportation kept it as one of those largely unexplored areas. By the start of the twentieth century, America’s increasing industrialization created new demands for oil and again pushed prices toward record highs. The result was a countrywide oil craze that sparked interest in all aspects of the industry from prospecting and drilling to refining and distribution. In Yavapai County alone, over twenty oil-related companies were incorporated between 1900 and 1903. Many of these start-ups intended to focus on distribution or to prospect in known oil fields outside of Arizona, but several efforts also took a more local interest.

Chief among these was the work of Joseph C. Heslet, who would become the pioneer in northern Arizona oil prospecting. Born in Pennsylvania in 1858, Heslet arrived in Jerome in the 1890s where he worked as an engineer for the United Verde Copper Company and spent his free time prospecting the surrounding area.2 While exploring the upper Verde River, Heslet rediscovered some small oil seeps along the banks that rancher John Brett had first noticed in 1899.

Heslet recognized that the nearby rolling hills of Chino Valley bore some resemblance to the oil-rich regions of his home state and he was soon convinced that they held vast oil fields as well. In 1902, he started drilling what was probably northern Arizona’s first oil well just north of today’s community of Paulden. Heslet’s work attracted relatively little attention and he did not get very far before cave-ins and groundwater flooding forced him to quit.3

Over the next ten years, Arizona’s oil focus shifted to other parts of the territory. In 1907, the discovery of oil along Utah’s Virgin River near the Arizona border sparked a brief flurry of claim filing in northern Mohave County and four years later the discovery of oil film in a rancher’s water well initiated another wave of claim-filing and even some limited drilling around Camp Verde and Cottonwood.4 But these and a few other brief Arizona oil rushes were relatively tame compared to what would take place next in Chino Valley when the start of World War One created new demands for oil.

As prices began to climb, Joseph Heslet decided to give drilling another shot and in 1916 he organized the Chino Valley Oil and Mining Company with N. D. Ross of Jerome.5 They tried reopening Heslet’s old well and reported finding traces of oil before water and cave-ins forced them to abandon the hole for a second time. Although their second attempt at drilling did not produce significant amounts of oil, it did attract significant amounts of attention.

In nearby Jerome, war-inflated copper prices were driving the town to new heights of prosperity. In this climate of economic optimism, the possibility of a nearby oil field captured peoples’ imaginations. As word spread of Heslet’s efforts, other prospectors began filing claims throughout the valley, resulting in a small land rush that did not subside until the following summer.6 As with many mining booms, the influx of prospectors and investors increased the sense of excitement and activity, which in turn attracted more prospectors and investors, creating a self-inflating sense of expectation that would quickly outpace the actual progress on the ground.

By the end of 1917, promoters had formed over a dozen new companies and were rapidly setting up offices and acquiring land. Among the most prominent of these new efforts were the Arizona Del Rio Oil Company, the Arizona Oil and Refining Company, and the Arizona-Oklahoma Oil and Gas Company. Founded in February of 1917, the Arizona Del Rio Oil Co. quickly acquired rights to some 3,000 acres in Chino valley.7 They were followed by the Arizona-Oklahoma Oil and Gas Co. which claimed land around Jerome as well as additional holdings in the oil lands of Oklahoma.8 Probably the most active of the new companies was the Arizona Oil and Refining Co. which controlled 640 acres near Heslet’s well. The company was organized in September of 1917 and located its main office in Prescott’s St. Michael Hotel.

After the excitement surrounding their initial organization, the early oil companies and their investors quickly learned that the actual drilling of an oil well was a very expensive, time-consuming, and complicated business with which few people in Arizona were familiar. At the time, most oil exploration was conducted using cable drills in which a large metal drill bit was repeatedly raised and lowered in the hole at the end of a steel cable—literally ‘pecking’ its way through the rock. Once the drill had been started (a process known as ‘spudding-in’) it required constant supervision to bail out the hole and ensure the cable was the optimum length. To prevent caving or the influx of ground water, the operators needed a good supply of specially designed tubes—called casings—to line the well. Mishaps, delays and broken cables were common. Even under the best of circumstances, a typical cable drill might only dig twenty or thirty feet per day and the total cost of equipping, crewing, and drilling a single well could easily exceed $20,000 (the equivalent of over $300,000 today). Faced with these challenges and expenses, by the end of 1917 only a handful of the new companies were actively setting up rigs and none had actually started drilling yet.

To raise funds for the purchase, setup and operation of their drilling rigs, most of the companies turned to selling stock certificates ranging anywhere from a few pennies to several dollars a share. Throughout late 1917 and early 1918, the pages of Yavapai Magazine and the Jerome and Prescott newspapers were filled with the often-frenzied advertisements of oil companies offering certain riches. To lure hesitant investors, many made a point of implying that stock prices would soon go through the roof once oil was discovered and now was the time to get in cheap and make a fortune.

“Oil! Oil! Buy now, while you have the chance,” screamed one advertisement for the Arizona-Oklahoma Oil and Gas Company while the newly formed United Chino Oil and Refining Company proclaimed that “You Owe It to Yourself, To Your Family, To Your Future, To Buy Shares In This Company.9 Even the locally owned Home Oil Company could not resist a sense of urgency in selling its three-cent stock with a notice reading “It is going fast. Don’t wait and pay more. Send your money order today. Buy all you can.”10

However, the most vocal and unabashed of these promoters were ‘Colonel’ Fred Bowler of the Arizona-Oklahoma outfit and Dr. E. A. Edwards of Arizona Oil and Refining Co. During a series of presentations in Jerome, Bowler enticed would-be investors with the promise that the almost-certain discovery of oil would produce twenty new millionaires in the area.11

But his assertions were tame compared to the flamboyant Dr. Edwards who claimed to have played a major role in the development of the American oil industry and to have personally discovered several of the country’s largest oil fields. He used this greatly exaggerated resume to promote both himself and his company. In an interview with the Arizona Mining Journal, Edwards predicted that, “from my own personal examination and past experience, the Chino Valley oil fields will become to Arizona what the Whittier, Ventura and Taft fields, with which I was identified, have been and are to California.”12 Edwards would later go on to form his own organization, the E. A. Edwards Oil and Refining Company, where he claimed to have started the Chino Valley boom.13

Edwards’ claims of being the area’s oil pioneer likely came as a surprise to Joseph Heslet, who after years of working the field alone suddenly found himself being overshadowed by the newcomers as competition intensified for funding and investors. In the November 27, 1917, issue of the Jerome Sun, Heslet expounded his company’s low capitalization of only 100,000 shares at $1.50 each. He also reminded readers that his was the first well and it was known to contain oil and thus “the buyer of stock in our company is taking no chances in that particular.” Heslet went on to say that, “we are glad to see this great activity and hope all will get busy and start drilling, but it is our idea that this well is the first one that should be put down. It would be better for the district to prove it than to take a chance on a dry hole or two elsewhere.”

Visits by well-known oil geologists also brought additional attention and were closely covered by the press and promoters. One of the first to examine the field was E. Ronald Sager, who concluded that, “in my experience covering nearly every oil field on this continent, I have never seen any other untested location that presented so many favorable features as this one.”14

Despite a lack of drilling—let alone oil—interest continued to increase as the year came to a close and saw the formation of even more companies. Further interest in the area was raised by the proposed formation of several new towns to support the oil fields. In April, Yavapai Magazine reported that a new town called ‘Heslet’ was in the process of forming where the Santa Fe railroad ran through the oil field and a month later the General Securities Investment Corporation started offering lots in the proposed town site of ‘Oil City’ in exchange for buying shares of Arizona Oil and Refining Company stock.15

Despite the promotions, geologist reports, and town founding, very little actual drilling had occurred in the field as the summer of 1918 approached. In January, the Arizona Oil and Refining Company had spudded-in the first new well followed by the United Chino Oil and Refining Company.16 But the Arizona Del Rio Company was just starting to assemble its rig, the Home Oil Company was still waiting for equipment to arrive and the Chino Central Oil Company had not even selected a drill site. Heslet’s Chino Valley Oil and Mining Company was still in the process of moving its drill to a new location after the collapse of their first well.17 In an attempt to coordinate their efforts, the oil companies formed the Arizona Chamber of Oil and Mines on May 6 including representatives from fourteen of the field’s oil companies. Later that summer, the Arizona Del Rio Oil Co., the United Chino Oil and Refining Co., the Arizona Oil and Refining Co., and the Home Oil Co. decided to join forces for a period of 30 days and focus all their efforts on the United Chino well.18

The coordination of efforts during the summer of 1918 helped to reduce expenses and increase efficiency, but it could not produce large quantities of oil where none existed. As the year came to a close, no company had successfully drilled more than a few hundred feet and one by one they quietly started to shut down and disappear. After nearly two years of hype and promotions without a single producing well, investors’ patience and wallets were both growing thin and many began to see the boom as a scam.

The Chino Valley had shown some promising geology and it is likely that many of the companies—particularly those owned by local businessmen—had started out with good intentions but a lack of oil drilling experience and the competition to raise funds soon created an atmosphere that thrived on prediction rather than production. A year later, geologist Philip Wilson pointed to Chino Valley as a cautionary tale about booms driven by speculation, noting that, “The last epidemic of the sort centered in the Jerome district in 1916 and a particularly virulent form of the disease it was. Most of the companies organized at that time are now defunct, many without even having started to develop their properties.”19

Despite the collapse of the Chino Valley boom and most of its associated companies, sporadic activity would continue in the area for many years. In the late 1920s and early 1930s, the Ari-Copa Drilling and Mining Company started several wells and reported reaching a depth of 3,000 feet without striking oil. They were followed by the Chino Valley Oil Development Company which sank a deep—and unsuccessful—well northwest of Paulden in the late 1930s.20 Joseph Heslet’s faith in the field also remained unshaken. In 1928, he formed the Anthony Oil and Refining Company and continued explorations around Yavapai County, but it proved no more successful than his earlier attempts.

Oil exploration would also continue around the rest of the state, usually in cycles driven by high oil prices or new geologic theories. Even as the Chino activity was starting to subside, a similar combination of promising geology and over-promising stock promoters would trigger another large boom—and ultimately bust—in the Holbrook area that would last into the 1920s. The Tonto Basin around Roosevelt Dam and the upper San Simon Valley near Safford also saw bursts of exploration and speculation around this period without actually producing any oil.

Finally in the 1950s, a team working for the Shell Oil Company did strike a small flow of oil in a test well in the extreme northeast corner of the state. Additional exploration—using better equipment and more detailed knowledge than was available to the early wildcatters—located a number of other small producing oil pools in the same area. Although these working oil fields have never been major producers, they have perhaps—in a small way—vindicated the dreams of Heslet and the other early oil prospectors.21

Today there are still frenzied booms in the Chino Valley, but the emphasis is on the land itself and the drilling tends to be for water. Summer homes and horse property now cover hills where oilrigs once stood. But unlike the large tailings piles, shafts and foundations of the abandoned hard-rock mines, there is relatively little left from the oil booms. In some places around Paulden, you can still find a few of the old well sites with a stub of casing pipe sticking out of the ground like a metal tree stump and sometimes repurposed as a water well. More telling evidence lies hidden away in family papers and archives scattered around the country—faded company prospectus statements and fancy stock certificates worth more today for their historic value than they ever were for oil. These are all that remains from the time when Yavapai County was poised to become, in the words of Dr. E. A. Edwards, “the next great field.”22

NOTES

1 Oil had been used (mostly for lamp fuel) since ancient times, but until Drake’s well it had always been gathered at those rare locations where it reached the surface naturally. For an excellent overview of the early history of the oil business, see Anderson, Robert, Fundamentals of the Petroleum Industry (Norman: University of Oklahoma Press, 1984).

2 “Joseph Heslet Taken By Death,” Arizona Republic, 9 April 1935.

3 Bowen, R. S., Oil Romance: New Gold For Arizona. Promotional brochure. 1939. Located in the Arizona Collection at Arizona State University.

4 Mohave County Miner, 3 August 1907. “Drilling for Oil to be started on Verde,” Prescott Journal-Miner, 8 July 1911. “Expert Convinced that Oil Exists in Verde Valley,” Prescott Journal-Miner, 11 August 1911.

5 Articles of incorporation for the Chino Valley Oil and Mining Company, Articles of Incorporation, Book 14, Yavapai County (1916).

6 “Oil Operators are Entering Big Chino,” Prescott Journal-Miner, 5 September 1917. The paper reported that claims covered more than 12,000 acres of land and that most of the desirable land was taken.

7 Arizona Del Rio Oil Company. Articles of Incorporation. Arizona Corporation Commission. 1917.

8 Arizona-Oklahoma Gas and Oil Company. Yavapai County Articles of Incorporation. Book 15. pp. 218. The company was organized on October 13 with one million shares at $1.00 per share. The board of directors included J. H. Anton and Charles McKinley.

9 “Arizona-Oklahoma Oil and Gas Co.,” Yavapai Magazine, December 1917, advertisement. “United Chino Oil,” Yavapai Magazine, February 1918, advertisement.

10 “Home Oil Company”, Yavapai Magazine, April 1918, advertisement.

11 “Jerome And Clarkdale For Oil Project,” The Jerome Sun, 5 November 1917.

12 “Dr. Edwards, Oil Pioneer, Talks,” Arizona Mining Journal, April 1918. Although Edwards did have experience in the California and mid-west oil industry, his claims to have discovered the Whittier and Lima oil fields are completely false and most of his other claims are greatly exaggerated or unsubstantiated.

13 “E. A. Edwards Oil,” Yavapai, February 1918, advertisement.

14 Sager, E. Ronald. Preliminary Report on Prospective Oil Fields in the State of Arizona. Unpublished report on file with the Arizona Geological Survey [1917?].

15 “Oil City, Arizona,” Arizona Gazette, 4 May 1918, advertisement. “Oil Activity In Yavapai,” Yavapai, April 1918. The April issue of Yavapai magazine contained numerous articles on the field including a good summary of the work completed by each company.

16 “Oil Drilling Started In Chino,” The Jerome Sun, 25 January 1918.

17 “Oil Activity In Yavapai,” Yavapai, April 1918.

18 "Oil Companies Unite," Yavapai Magazine, August 1918. The Home Oil Company withdrew from the group a short time after.

19 Wilson, Philip D., “Investing in Oil Stocks: A Caution,” Arizona Mining Journal, April 1919.

20 Bowen, R. S., Oil Romance: New Gold For Arizona.

21 Since the first discovery in 1954, Arizona wells have produced more than 20 million barrels of oil and 28 billion cubic feet of natural gas.

22 “Dr. Edwards, Oil Pioneer, Talks,” Arizona Mining Journal, April 1918.