OIL: Triple Play

To the U.S. oil industry, which has moved its exploration steadily westward, came news last week that sent wildcatters racing back East. Near Conneaut, Ohio, only 50 miles from the first U.S. well at Titusville, Pa., a rich well came in in an area everyone thought was exhausted. The flow: an initial 6,720 bbl. daily v. an average ½ bbl. daily for the only remaining wells near by. The name of the man responsible for the strike was no surprise. He is old Mike Benedum, 88, the king of the wildcatters and a man who says proudly: “I have unloosed more oil than anyone else in the world.”

Texas & Wyoming. The Ohio well—and possibly a big new field—was the third brought in by Benedum companies in a month. Fortnight ago, near Gillette, Wyo., the three Benedum companies (Penn-Ohio Gas, Hiawatha Oil & Gas, Benedum-Trees Co), that hit in Ohio also brought in another promising oil pool on a 90,000-acre leasehold of virgin oil land, pumped an initial 350 bbl. daily and are now drilling a second well. Last week, in Brooks County, Texas, still another well came in for the same three outfits, this one capable of producing 30 million to 40 million cu. ft. of gas daily on 1,600 acres of previously undeveloped land. But the Ohio strike was the most spectacular, smack dab in old Mike’s backyard, not many miles from the Pittsburgh headquarters of an oil empire stretching from Canada to Africa.

The discovery was the result of a dogged effort to see if new drilling techniques could coax more oil out of the Appalachian basin where U.S. oilmen brought in their first wells almost a century ago. The companies gambled on three wells—and got three dry holes. With the fourth, on a 9,000-acre lease (annual rental: 25¢ an acre) in the northeast corner of the state, he finally hit the jackpot. Benedum figures the well should produce at least 1,000 bbl. daily on a long-term basis. Within hours of the strike nine companies were in the area snapping up land, and lease prices skyrocketed to $83 an acre. Benedum’s companies are already starting two more wells. Says he: “This is the greatest discovery in this area in the last 30 or 40 years.”

The Lone Wolf. For Mike Benedum it was also the capper on as fabulous a career as the fabled oil industry has ever seen. He has had a hand in virtually every major U.S. oilfield, and wound up with a personal fortune estimated at something like $250 million.* “I’ve always been a lone wolf,” says Benedum. “I started as one and I’m finishing as one. I may be the last “of the breed.”

Tall, spare, drill-pipe-straight Michael Late (after the doctor who delivered him) Benedum got into the oil business in the days when “anybody could drill for oil that was of a mind to. I don’t remember ever meeting a geologist or even hearing the word.” Benedum, son of a West Virginia cabinetmaker, teamed up with an oilfield roughneck named Joe Trees, and hit oil in Pleasants County, West Va. in 1895. He was soon making $1,500 to $2,000 a month from the property, and drilling more wells, at one point brought in eleven straight producers.

Caddo & Queen Marie. Mike Benedum was lucky, but he was also razor-sharp. Once he went gunning for a promising lease, but found that Standard Oil was there ahead of him. Looking up the deeds, he discovered that the land belonged to a sickly old widow, promptly persuaded her heirs to sell him the property on a “when-as-and-if” basis; the day after Standard brought in its first well, the widow died, whereupon Mike sold the property back to Standard at “a nice price—a very nice price.” Like every gambler, he took some lickings and came back for more. Says Benedum: “All that counts is how the averages are working out.”

The averages worked out fine. Benedum-Trees was a pioneer in the huge Caddo pool in Louisiana, organized Penn Mex Fuel Co., and brought in two wells totaling 115,000 bbl. daily in Mexico’s “golden lane” south of Tampico. When the partners sold out in 1916, they made $3,159,000 clear profit. Benedum discovered the famous De Mares Pool in Colombia on which International Petroleum fattened and wildcatted in Rumania’s Ploesti field at Queen Marie’s personal invitation. By 1948 he was back in the U.S. with still another new field, West Texas’ Benedum Field, whose reserves were estimated as high as 600 million bbl.

Ivory Coast. Today Mike Benedum is no longer the continent-hopping wildcatter of the past. Partner Trees died in 1943; his nephew Paul Benedum and half a dozen lieutenants run the empire he built. But from Miami Beach’s Roney Plaza Hotel, where he spends each winter, and Pittsburgh’s exclusive Duquesne Club, where he recently rebuilt an elevator to take him directly to his fifth-floor suite, he keeps tab on every well. Besides Ohio, Wyoming and Texas, Benedum’s wildcatters are exploring 750,000 acres in Colombia, also have 450,000 acres in Guatemala, and are dickering with a French oil company to help develop 3,000,000 acres along Africa’s Ivory Coast. Says old Mike: “There’s no country in the world of any magnitude that does not have some oil. We have only begun to find the oil that’s available in the world.”

*He owns 31% of Plymouth Oil Co. (assets: $90 million), is the man behind Penn-Ohio Gas Co., Melben Oil Co., Republic Pipe Line Co., Cavalier Oil Co., Bentex Oil Co., half a dozen others with combined assets of well in the hundred millions. He is also the biggest stockholder in Ohio Oil Co. and the largest individual stockholder in International Petroleum Co.