15 May 2009

Olinda Oil Field Historical Tidbit

The first entity to try and develop the western end of Carbon Canyon was the Olinda Land Company. After Edward Doheny, however, completed the first successful oil well in the area, Olinda Land became an oil company, with most of its operations centered southeast of today's intersection of Carbon Canyon Road and Valencia Avenue, where there are still operating wells today.

While not as big as Santa Fe, Columbia, Puente or some other concerns operating at Olinda, it did have some successes. A 4 March 1913 article in the Los Angeles Times gives some idea of the company's operations:

The Olinda Land Company has just finished well No. 5 at 3000 feet in the light oil division of the property, demonstrated on the Puente lease adjoining. This is the first effot the Olinda has made to derive production from this part of its property, No. 5 being at some distance from the other wells. The company has also adopted the policy which has become rather prevalent in this district of deepening some of its old producers.

The gross income of the Olinda Land Company for the year 1912 was $125.885.19, according to the annual report recently issued to the stockholders. Of this total all but about $11,000 was derived from two sources--the company's own production which brought in approximately $61,297.02, and the royalties from the property leased to the West Coast Oil Company, which returned $53,610.60 according to the report.

The company has paid eighteen dividends, aggregating $195,000, the rate being 3 per cent on par.

During the past year a bonded indebtedness of $200,000 was created, of which $100,000 has been sold, and it is stated that the money accruing from the sale of the bonds has enabled the company to double their drilling from three strings to six strings, and also to increase the regularly quarterly divident from 1/2 to 3/4 cent per share, as a portion of the income can be used for this purpose that previously has gone back into development.

Because Olinda Land started off as a property owner for developing the tract as a subdivision, it was able to generate some income by leasing land out to another oil company.

It also had four wells, though how many were producers or regular ones is not known. Also not known is the company's expense sheet for 1912 to see how profitable it was, though the eighteen dividends do indicate some extended profitability.

Also, deepening of wells reflects the rapid growth in technology, in that in the 1890s and 1900s well depths were not usually beyond 2000 or a little more in feet, but by 1913 techniques had improved dramatically. By the mid-1920s, wells of between 4 and 5,000 feet in depth were being achieved, meaning the deeper pockets or pools in previously proven wells were available to tap.

Finally, the growing use of bonded indebtedness to raise capital for more intensive devleopment, whether it be for a real estate subdivision or oil prospecting, was changing the game for oil companies in that era.

This brief article gives a little idea of oil drilling activity at Olinda almost a century ago. In the 1920s map detail above, the little circles show oil well sites in the general Olinda oil field area, with six dots east of Valencia Ave. (then Olinda Boulevard) and south of Carbon Canyon Rd. likely showing the Olinda Land Company tract. More Olinda oil history is coming soon!

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