Discovery of Oil on the Hill

Discovery of Oil on the Hill. Part of the “Memory Necklace”. In 1920, Signal Hill was a grassy dome dotted with seasonal farms. Though there was interest, opinions among oil company geologists about the prospects for oil here were mixed. A well near the corner of Wardlow and Atlantic Streets, drilled to 3,449 feet in 1916, had become known as “the expensive dry hold.” Obtaining oil leases in Signal Hill was also expensive and difficult because exclusive residential estates were being built in the area. This rural domain would soon change with the discovery of oil., Alamitos Well No. 1 near the corner of Hill and Temple Streets was “spudded” (the start of drilling) by the Royal Dutch Shell Oil Company, predecessor to the Shell Oil Company, on June 23, 1921. Dr. W. Pelekan, an executive geologist for Royal Dutch Shell, is reported to have exclaimed, “They’re drilling a well on Signal Hill, and I’ve got to put a stop to it.” He made plans to travel to California to shut down the drilling, but before he could, the well struck oil at a depth of 3,114 feet. The well blew in as a “gusher,” shooting oil over 10 feet into the air! Within two days, the well was flowing 1,200 barrels of oil per day, and the oil rush on Signal Hill was born., In the early 1920’s California Oil World reported, “Signal Hill is the scene of feverish activity, of an endless caravan of automobiles coming and going, of hustle and bustle of a glow of optimism. Derricks are being erected as fast as timber reaches the ground. New companies are coming in overnight. Every available piece of acreage on and about Signal Hill is being signed up.”, Alamitos Well No. 1 began a new era in California oil history and remarkably it is still producing today. By 1923, over 270 wells in the Signal Hill area, operated by 37 companies, produced over 140,000 barrels of oil per day. The wooden oil derricks were so dense on the hill that it became known as “Porcupine Hill.”, The Signal Hill oilfield has proven to be one of the richest in North America, having produced almost one billion barrels of oil to date. As engineering estimates indicate that two billion barrels of oil are still in the ground, the Signal Hill oilfield will continue to be a valuable source of energy for decades to come.