BigOilFields.Com
In Hollywood, an oilman quipped:
"When you see a group of movie
people talking on the set, you don't
know whether they're discussing an
oil well or a movie."
Oil was on Hollywood's mind.
Moviedom's tax-bitten stars thought
they had found a sure—or almost
sure—way out of their troubles in the
high tax brackets. If they struck oil,
they could deduct 50% to 75% of the
drilling expenses from their income,
and later deduct 27½% of their
annual gross from the well, as
"depletion." Moreover, they could sell
the well later and pay only a long-term
capital gains (25%) tax on the profit.
If the well was dry, they could write
off the whole cost as a loss, thus cut
down taxable income. Though many
a hopeful had hit nothing but sand
and salt, from Texas to Utah last
week a handful of luckier stars had
struck it rich.
Black Gold. Near Wichita Falls, Tex.,
Gene Autry's sixth well, begun a
fortnight ago, had come in
handsomely. The drillers had struck
oil at 5,000 ft. The well gushed 1,200
barrels the first day, settled down to a
tidy daily flow of 1,000 barrels. (Autry
owns equal shares in the claim with
two Texas wildcatters.) Last week
drillers started a seventh well, planned
to drill some 20 more on Autry's
property.
Jimmy Stewart reported a steady 800
barrels a day from his No. i well,
brought in at 4,180 ft. near Vernal,
Utah, last fortnight. Stewart and his
partners (among them: Continental
Airlines' President Robert Six;
Howard Hughes's ubiquitous agent,
Johnny Meyer; and General Aniline &
Film's Chairman Jack Frye) had
risked $75,000 on a tip Meyer got
from a geologist who had previously
tipped Meyer and Frank Sinatra to
another payoff site (Sinatra's
"Crooner No. i" well in Wyoming).
Star Dust. In Texas' Scurry County,
on a 1,700-acre tract leased by Bob
Hope and Bing Crosby, drillers
brought in a 1,000-barrel well, their
second in two months. Hope and
Crosby and their two Texas partners
promptly began drilling two more.
Near by, Don Ameche, who had
leased 21,600 acres with three
Chicago partners, had put up
$200,000 to sink a wildcat. Just east
of the small town of Rotan, Tex.,
where he had leased 1,500 acres,
Randolph Scott and his partner found
oil sands at 5,700 ft., hoped to be
producing "within three weeks."
Not all of Hollywood's wildcatters had
been so lucky. Directors John Huston
and Mervyn Le Roy, and Actor
Dennis O'Keefe and several oilmen
recently sank $194,000 into a 10,500-
ft. dry well near Inglewood, Calif.
Even those who had made strikes
would not necessarily turn them into
profits; they still had the problem of
operating the well and marketing the
oil. As one California oilman put it: "I
can give you an oil well which is
actually producing a good amount of
oil, and bet you'll go broke if you
don't know what you're doing. The
stars . . . don't know enough about
the business . . ."
from Time in 1949
"When you see a group of movie
people talking on the set, you don't
know whether they're discussing an
oil well or a movie."
Oil was on Hollywood's mind.
Moviedom's tax-bitten stars thought
they had found a sure—or almost
sure—way out of their troubles in the
high tax brackets. If they struck oil,
they could deduct 50% to 75% of the
drilling expenses from their income,
and later deduct 27½% of their
annual gross from the well, as
"depletion." Moreover, they could sell
the well later and pay only a long-term
capital gains (25%) tax on the profit.
If the well was dry, they could write
off the whole cost as a loss, thus cut
down taxable income. Though many
a hopeful had hit nothing but sand
and salt, from Texas to Utah last
week a handful of luckier stars had
struck it rich.
Black Gold. Near Wichita Falls, Tex.,
Gene Autry's sixth well, begun a
fortnight ago, had come in
handsomely. The drillers had struck
oil at 5,000 ft. The well gushed 1,200
barrels the first day, settled down to a
tidy daily flow of 1,000 barrels. (Autry
owns equal shares in the claim with
two Texas wildcatters.) Last week
drillers started a seventh well, planned
to drill some 20 more on Autry's
property.
Jimmy Stewart reported a steady 800
barrels a day from his No. i well,
brought in at 4,180 ft. near Vernal,
Utah, last fortnight. Stewart and his
partners (among them: Continental
Airlines' President Robert Six;
Howard Hughes's ubiquitous agent,
Johnny Meyer; and General Aniline &
Film's Chairman Jack Frye) had
risked $75,000 on a tip Meyer got
from a geologist who had previously
tipped Meyer and Frank Sinatra to
another payoff site (Sinatra's
"Crooner No. i" well in Wyoming).
Star Dust. In Texas' Scurry County,
on a 1,700-acre tract leased by Bob
Hope and Bing Crosby, drillers
brought in a 1,000-barrel well, their
second in two months. Hope and
Crosby and their two Texas partners
promptly began drilling two more.
Near by, Don Ameche, who had
leased 21,600 acres with three
Chicago partners, had put up
$200,000 to sink a wildcat. Just east
of the small town of Rotan, Tex.,
where he had leased 1,500 acres,
Randolph Scott and his partner found
oil sands at 5,700 ft., hoped to be
producing "within three weeks."
Not all of Hollywood's wildcatters had
been so lucky. Directors John Huston
and Mervyn Le Roy, and Actor
Dennis O'Keefe and several oilmen
recently sank $194,000 into a 10,500-
ft. dry well near Inglewood, Calif.
Even those who had made strikes
would not necessarily turn them into
profits; they still had the problem of
operating the well and marketing the
oil. As one California oilman put it: "I
can give you an oil well which is
actually producing a good amount of
oil, and bet you'll go broke if you
don't know what you're doing. The
stars . . . don't know enough about
the business . . ."
from Time in 1949
Famous Oil Investors
Hidalgo Partners
2806 Elm Grove Ct.
Kingwood, TX 77339
ph: 713-208-4196
fax: 832-201-9978
alt: 512-422-0508
deanphilpot@bigoilfields.com
2806 Elm Grove Ct.
Kingwood, TX 77339
ph: 713-208-4196
fax: 832-201-9978
alt: 512-422-0508
deanphilpot@bigoilfields.com
Learn more about Peak Oil at EnergyAndCapital.com.
