Spindletop is a salt dome formation south of Beaumont in Jefferson County, Texas, where the Lucas well struck oil on January 10, 1901.¹ The Handbook of Texas describes the discovery as the birth of the modern petroleum industry.¹ The gusher set off the first oil boom in Texas, and several of the major oil companies of the twentieth century were formed or grew large through their involvement in the field.¹²

Early attempts

Pattillo Higgins, a Beaumont businessman, believed that oil and gas lay beneath Spindletop Hill at a time when conventional wisdom held that the Gulf Coast had no petroleum potential.³ In August 1892 Higgins, George W. Carroll, George W. O’Brien and others incorporated the Gladys City Oil, Gas, and Manufacturing Company, the first company to drill on the hill.¹³ Three shallow attempts beginning in 1893 failed, and Higgins resigned from the company in 1895 after a dispute with its directors.¹³

Higgins then advertised nationally for someone to develop the tract.³ Anthony F. Lucas, an engineer regarded as the leading United States expert on salt dome formations, answered and made a lease with the Gladys City company in 1899.¹⁴ His first well reached 575 feet before his money ran out and his light equipment gave way in the difficult sands of the dome.¹⁴

The Lucas gusher

Lucas secured the backing of John H. Galey and James M. Guffey of Pittsburgh, whose support was in turn financed largely by the Mellon interests. Their terms left Lucas a small share and excluded Higgins entirely.¹⁴ Galey and Guffey brought in Al and Curt Hamill, an experienced drilling team from Corsicana, where the first economically significant Texas discovery had been made in 1894.¹²

Lucas spudded the new well on October 27, 1900, using a heavier rotary bit.¹ On January 10, 1901, mud, then gas, then oil erupted from a depth of 1,139 feet, throwing drill pipe from the hole and a stream of oil more than 100 feet high.¹ The well was brought under control on January 19.¹ Estimates of its initial flow differ between Handbook entries: the entry on the field gives about 100,000 barrels a day, while the general entry on the industry gives more than 75,000.¹²

The boom

Speculation followed at once. The Handbook records a tract offered for $150 that sold for $20,000 and was resold within fifteen minutes for $50,000, and one well bought for under $10,000 that later sold for $1,250,000.¹ By 1902 more than 500 Texas corporations were doing business in Beaumont, and an estimated $235 million had been invested in Texas oil in 1901.¹ Figures for the town’s growth vary by source: the field entry gives a rise from 10,000 to 50,000 during the boom, while census counts in the Beaumont entry show 9,427 residents in 1900 and 20,640 in 1910.¹⁵

The overabundance of wells led to a rapid decline in production. Spindletop yielded 17,500,000 barrels in 1902 but was down to 10,000 barrels a day by February 1904.¹ Well spacing later became a matter of state regulation: in 1919 the legislature gave the Railroad Commission of Texas responsibility for well spacing rules.⁶

Later development

A second boom began on November 13, 1925, when the Yount Lee Oil Company completed a well on the flank of the dome at 5,400 feet.¹ Production reached its annual peak of 21,000,000 barrels in 1927.¹ The field later produced sulphur from the 1950s until about 1975, along with salt brine, and by 1985 it had yielded more than 153,000,000 barrels of oil.¹ The withdrawal of oil, sulphur and brine caused the dome to subside, and a granite monument erected in 1941 near the site of the Lucas well was moved to the Spindletop/Gladys City Boomtown Museum on the Lamar University campus.¹

Consequences

The Texas Company (later Texaco), Gulf Oil Corporation and Humble (later Exxon) were formed in Beaumont during the first year of the boom.⁵ Gulf grew out of the J. M. Guffey Petroleum Company, organized in May 1901, which acquired the interests of Lucas and Galey in the field and built a refinery at Port Arthur.⁷ Storage, pipelines and major refineries rose across the Beaumont, Port Arthur, Sabine Pass and Orange area.¹ Service, supply and manufacturing companies then located plants and distribution facilities in the Houston, Beaumont and Port Arthur area, diversifying the regional economy.² Those businesses were early forms of the industry now described under oilfield services. In the next generation the East Texas oil field, discovered in October 1930, brought unrestrained production that drove crude prices down worldwide.²⁶

Record

The Library of Congress holds a photograph of the field copyrighted about 1901 by the Bernier Publishing Company of New York, showing ranks of wooden derricks behind plank sheds and tents.⁸ Spindletop is part of the energy history that informs the investing essays on this site, among them the essay on timing in energy banking. Other entries are listed in the reference index.

References

Texas State Historical Association, Handbook of Texas, Spindletop Oilfield ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹² ↩¹³ ↩¹⁴ ↩¹⁵ ↩¹⁶ ↩¹⁷ ↩¹⁸ ↩¹⁹ ↩²⁰ ↩²¹ ↩²²
Texas State Historical Association, Handbook of Texas, Oil and Gas Industry ↩ ↩² ↩³ ↩⁴ ↩⁵
Texas State Historical Association, Handbook of Texas, Higgins, Pattillo ↩ ↩² ↩³ ↩⁴
Texas State Historical Association, Handbook of Texas, Lucas, Anthony Francis ↩ ↩² ↩³
Texas State Historical Association, Handbook of Texas, Beaumont, TX ↩ ↩²
Texas State Historical Association, Handbook of Texas, Railroad Commission ↩ ↩²
Texas State Historical Association, Handbook of Texas, Gulf Oil Corporation ↩
Library of Congress, Prints and Photographs Division, Spindletop, Beaumont, Port Arthur, and vicinity, Texas ↩