Dabney Oil Syndicate
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The Dabney Oil Syndicate refers to a number of
petroleum Petroleum, also known as crude oil or simply oil, is a naturally occurring, yellowish-black liquid chemical mixture found in geological formations, consisting mainly of hydrocarbons. The term ''petroleum'' refers both to naturally occurring un ...
-drilling enterprises in
California California () is a U.S. state, state in the Western United States that lies on the West Coast of the United States, Pacific Coast. It borders Oregon to the north, Nevada and Arizona to the east, and shares Mexico–United States border, an ...
involving Joseph B. Dabney and his associates.


History


Dabney Oil Company

Joseph Benjamin Dabney, born 1858 in
Madison County, Iowa Madison County is a county located in the U.S. state of Iowa. As of the 2020 census, the population was 16,548. The county seat is Winterset. Madison County is included in the Des Moines– West Des Moines, IA Metropolitan Statistical Ar ...
, was in California at the turn of the 20th century when interest was being awakened in the possibilities of drilling for oil. In 1900, E. J. (Emmor Jerome) Miley sold his fruit holdings and joined with Dabney in leasing a tract in the McKittrick district in the
San Joaquin Valley The San Joaquin Valley ( ; Spanish language in California, Spanish: ''Valle de San Joaquín'') is the southern half of California's Central Valley (California), Central Valley. Famed as a major breadbasket, the San Joaquin Valley is an importa ...
. Ten oil wells were drilled the first year. In May 1901, the Dabney Oil Company was incorporated with capitalization of $1 million, and the two sold their holdings to the corporation. Frank H. Powers, partner in the law firm of Heller & Powers, with offices at Montgomery and Pine in
San Francisco, California San Francisco, officially the City and County of San Francisco, is a commercial, Financial District, San Francisco, financial, and Culture of San Francisco, cultural center of Northern California. With a population of 827,526 residents as of ...
, became the secretary of Dabney Oil Company, Inc., at 330 Pine Street.


Hidalgo Oil Company

In 1913, Miley, Dabney, and Ralph B. Lloyd formed the Hidalgo Oil Company to drill for oil in
Simi Valley, California Simi Valley (; Chumashan languages, Chumash: ''Shimiyi'') is a city in Simi Valley (valley), the valley of the same name in southeastern Ventura County, California, United States. It is from Downtown Los Angeles, making it part of the Greater ...
, near the ranch owned by the Ventura Land & Water Company, the family firm of Lewis M. Lloyd and his children. At the time, Ralph B. Lloyd, one of the children, was operating the ranch, and persuaded Dabney and Miley to drill four wells in the area. All of them were dry or failed to sustain production. Miley and Dabney sold their interest in Hidalgo a year later. For his part, Miley would continue to drill wells for Dabney and Lloyd, as State Consolidated Oil Company.


State Consolidated

State Consolidated, formed by Miley and others in March 1911, and capitalized at $1.25 million, did rather well in
Kern County, California Kern County is a county (United States), county located in the U.S. state of California. As of the 2020 United States census, 2020 census, the population was 909,235. Its county seat is Bakersfield, California, Bakersfield. Kern County compris ...
, and by 1920 was operating 33 producing wells there. Dabney would become one of the most prominent small operators of the
Los Angeles Los Angeles, often referred to by its initials L.A., is the List of municipalities in California, most populous city in the U.S. state of California, and the commercial, Financial District, Los Angeles, financial, and Culture of Los Angeles, ...
basin with the discovery of oil at
Signal Hill, California Signal Hill is a city in area in Los Angeles County, California. Located high on a hill, the city is an enclave completely surrounded by the city of Long Beach. Signal Hill was incorporated on April 22, 1924, roughly three years after oil was ...
. Between his Dabney Oil corporation and his Joseph B. Dabney and Company partnership, he was operating 17 producing wells by 1920. Despite their lack of success in the Simi Valley, Ralph Lloyd convinced Dabney to lease much of the ranch lands that lay on either side of the Ventura River and adjacent to the city of
Ventura, California Ventura, officially named San Buenaventura (Spanish for "Saint Bonaventure"), is a city in and the county seat of Ventura County, California, United States. It is a coastal city located northwest of Los Angeles. The population was 110,763 at the ...
. Lloyd had attended the
University of California The University of California (UC) is a public university, public Land-grant university, land-grant research university, research university system in the U.S. state of California. Headquartered in Oakland, California, Oakland, the system is co ...
, where his study of geology confirmed his belief that his family's ranch, and those around it, lay atop a vast oil pool. When Lewis Lloyd sold his 4,500 acres (18 km2) of pasture that straddled the
Ventura River The Ventura River, in western Ventura County in southern California, United States, flows from its headwaters to the Pacific Ocean. The smallest of the three major rivers in Ventura County, it flows through the steeply sloped, narrow Ventura ...
in 1903, Lloyd convinced his father to retain the mineral rights. It proved to be a wise decision. State Consolidated drilled three wells on this property and another on the adjacent Louis Hartman ranch, but Miley's drilling crews were unable to cope with the enormous gas pressures that they encountered. Indeed, one well blew out. Dabney and Lloyd decided to bring in a major company with the financial resources and technology to handle the area's difficult geology and steep terrain. On 12 June 1916, they signed an agreement with Shell Company of California, a subsidiary of
Royal Dutch Shell Shell plc is a British multinational oil and gas company, headquartered in London, England. Shell is a public limited company with a primary listing on the London Stock Exchange (LSE) and secondary listings on Euronext Amsterdam and the New ...
, covering more than 9,000 acres. Lloyd and four other landowners in the area received the industry standard 12.5% royalty on leases. Dabney and Lloyd received an overriding royalty on each lease covered by the agreement. Lloyd thought he had an exclusive right to negotiate leases for Shell; Shell thought otherwise. When they went directly to
Southern California Edison Southern California Edison (SCE), the largest subsidiary of Edison International, is the primary electric utility company for much of Southern California. It provides 15 million people with electricity across a service territory of approximate ...
to negotiate a lease, Lloyd felt betrayed.


Associated Oil Company

Subsequently, Lloyd and Dabney turned to the
Associated Oil Company Associated Oil Company (Flying A) was an American oil and Natural gas, gas company once headquartered in San Francisco, California and served much of the West Coast of the United States, Pacific West Coast, including Hawaii, as well as the Orient ...
, another California major, offering an option in their "as yet unproven" part of the Ventura field. In February 1920, they and State Consolidated gave an option on 1,500 acres (6 km2) to Associated Oil for $30,000. Associated gave them an additional $20,000 for materials and labor incurred in redrilling Lloyd No. 3 during the option period. When Associated took up the option, they paid another $200,000 for a lease that provided a 20% royalty and one-third of the oil produced, plus an additional 30% that started after Associated had recovered the $250,000 it had paid for option and lease, and ended after the 30% gave Dabney-Lloyd and State Consolidated $500,000. After that, Associated only paid a 20% royalty. The Lloyd lease proved to be one of the most lucrative in the fiel

The lease also required that Associated drill so-called offset wells, to prevent draining from adjacent leases. This was part of the strategy of Dabney and Lloyd to develop the field in an "orderly" manner. Indeed, both Associated and Shell cooperated in maximizing the long-term output of the field, which to date has produced almost one billion barrels of crude oil. The breakthrough in production came in January 1925, with the completion of Associated's "Lloyd" No. 9-A. Royalties from production over the next few years made Dabney and Lloyd wealthy men. For instance, "Lloyd" No. 9-A generated $378,000 total production in its first two months alone.


Goleta Oil Dome Company and Miley Oil Company

In April 1927, Dabney and several others incorporated the Goleta Oil Dome Company, capitalized at $1 million, for the purpose of exploring the Tecolote district in the Goleta, California, Goleta area of south
Santa Barbara County, California Santa Barbara County, officially the County of Santa Barbara (), is a County (United States), county located in Southern California. As of the 2020 United States census, the population was 448,229. The county seat is Santa Barbara, California ...
. Miley, too, searched for oil in this area as well. Indeed, his Miley Oil Company discovered the minor Goleta field in February 1927. Rapid encroachment of water forced Miley and other operators to abandon their wells eighteen months later. Both Dabney and Miley were shut out of the much more lucrative Elwood field, which was discovered in June 1928 near the coast, due south of the Goleta field. Joseph Dabney died in 1932.{{Cite web , url=http://alumnus.caltech.edu/~sla/dabney/dabney3x5.html , title=Los Angeles Times, Sept. 12, 1932 obituary of Joseph Dabney , access-date=2006-09-14 , archive-url=https://web.archive.org/web/20060914024012/http://alumnus.caltech.edu/~sla/dabney/dabney3x5.html , archive-date=2006-09-14 , url-status=dead In 1933, Miley pleaded guilty to a misdemeanor violation of the California Corporate Securities Act in connection with his promotion of the Miley Petroleum Exploration Company, a subsidiary of the Miley Oil Company, and was sentenced to one year in jail.


Raymond Chandler

Raymond Chandler Raymond Thornton Chandler (July 23, 1888 – March 26, 1959) was an American-British novelist and screenwriter. In 1932, at the age of forty-four, Chandler became a detective fiction writer after losing his job as an oil company executive durin ...
came to work for the Dabney Oil syndicate in 1922 as a bookkeeper and auditor in their Signal Hill (Los Angeles) office. He rose to office manager and vice-president, but was fired in 1932 for drinking, womanizing, and absenteeism. Because he had testified for them in a trial, two of his friends from the oil business offered him $100/month for living expenses. He spent the next year honing his writing skills, and became a master of pulp fiction, turning the hard-boiled detective novel into an art form.


College philanthropy

Joseph B. Dabney was a trustee of
California Institute of Technology The California Institute of Technology (branded as Caltech) is a private research university in Pasadena, California, United States. The university is responsible for many modern scientific advancements and is among a small group of institutes ...
. Dabney Hall of the Humanities, a gift of Mr. and Mrs. Dabney, is one of the four corner buildings of Caltech's central courtyard. It was built in 1927. In 1928, the Dabneys gave $200,000 to build Dabney House, one of four new residence halls.


References

Defunct oil companies of the United States Petroleum in California Oil fields in Kern County, California Companies based in Kern County, California Defunct companies based in California