1967: Oil business was booming in Bell Creek

By: 
Amorette Allison
Star History Columnist

Montana has played a part in the fossil fuel business since the early days. The coal fields of eastern Montana were mined even before there were formal mines. Those black steaks in the cut banks are low grade coal. You can often see shallow tunnels dug into the coal where a homesteader got his fuel supplies.

Carbon Hill, better known today for its water tank, once housed a small mine that provided coal for area residents. The Storm King mine was operational on and off for decades.  Coal seam fires in the prairies still cause problems.  And we are all familiar with the hundred plus cars of coal trains that rumble through town about 20 times daily.

Oil has also been part of the energy story in eastern Montana. While Miles City is surrounded by various oil fields, Custer County itself has none. Still, oil companies throughout the first half of the twentieth century based their offices in Miles City because it was the largest town in the area and had an airport, plus good train and bus connections.

In 1967, all attention was focused on the Bell Creek oil fields. Bell Creek is located just north of the Wyoming border in the southeast corner of Powder River County and extends into Carter County.

But the biggest newspaper in the area was and still is the Miles City Star so there were lots of front page stories in 1967 on the great Bell Creek oil boom.

Mike Davis of the Tiger Oil Company of Denver, Colo. made a name for himself during the Bell Creek boom by bidding on tracts during the state land auction in Helena. He was bidding for money man Wendell Haley, owner of Tiger. 

As the story from the Associated Press — printed on the front page of the Star on Sept. 12, 1967 — states it was the largest auction since the Williston boom in 1952. There were 415 tracts and 204,445 acres offered with a minimum bid of $1 per acre for leases.

The Powder River, Carter and Custer counties went for the big bucks.  Davis bid $60 an acre for a section in Carter County. The second highest bid of $30.25 an acre for land in Powder River County went to Davis’ chief rival, Ike Elkenberg of Midland, Texas.

Most leases in the rest of the state were going for as little a $3 an acre up to $12 an acre but the biggest number were racked up only in their proximity to Bell Creek.

Paul Husted, then editor of the Star, went to Helena for the auction and interviewed Davis, who was quoted as saying “I came to spend money.”

And money he spent. The state made $1.7 million plus at the auction with over $700,000 bid by Davis alone. 

At the auction, he told Husted, “I have three rigs drilling and I’ll put six more in the field” as soon as he received state permission.

According to Husted, Davis was sure of his investment. He bought an $800,000 Lear jet the week before.

The state cooperated in Davis’s plans. Days after the auction, the Montana Oil and Gas Commission announced that rather than permitting one well per 80 acres, they would allow 40-acre spacing. Which meant that Davis, Sam Gary, another Colorado oil wildcatter involved in the Bell Creek boom, and others could double their number of rigs without increasing the amount of land they already had under lease.

In addition, two pipelines were under construction to take the oil from the field. These were to be completed just as the boom hit its peak. Bell Creek oil was selling for $2.40 a barrel. In today’s market, that seems laughably low, but estimates at the time and at that price put the amount of oil in Bell Creek worth $45 million in 1967 dollars.

All that money meant a big boom in taxes paid for Powder River County but not until the taxes were collected in 1968 and delivered in early 1969. Which means the county had no money to pay for roads or bridges to the fields. 

Oil drillers were optimistic enough that they put in roads and bridges to reach the field.

By October 18, according to a front page article in the Star, there were 57 producing oil wells with 15 more rigs under construction.

The boom, like all booms, didn’t last. Each succeeding year saw fewer wells and less oil, although there were some operational wells for the next 40 years. 

In 2012, the Bell Creek field had 472 wells spread out over 22,000 acres, although few were in actual production. That’s when it was announced that drillers were going to try something new. Instead of using water to force out the oil, they would use CO2.

And, came the announcement, not only would Bell creek start producing again, with development starting in 2013 and lasting through 2019, but carbon dioxide would be safely stored underground, reducing greenhouse gases in the atmosphere. Or so the hopes went.

Then Bakken went bust. And while the CO2 sequestration project did take place, it was not on the scale originally envisioned. 

Once oil prices are back up, the Bell Creek oil field will probably get attention again. Just not quite as enthusiastically as it did in the glory days of 1967.

(Amorette Allison is a local history columnist.)

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