Sherman No. 1 wildcat oil well at the head of Hill street indicate[s] that an oil pool of major dimensions has been tapped directly under Newhall.

Four or five days will be required to bring the well into production.

R.W. Sherman, noted geologist who located the site and who drilled the well, estimated a minimum flow of 500 barrels of 40 gravity oil. Other competent observers say it is even better than that.

The discovery is expected to touch off a sensational drilling program.

Leasing activity, previously vigorous, is expected to redouble in energy.

Here are the facts as reported this week by the E.J. Munger Oil Scouting Service:

Total depth of well, 5,846 feet.

Top of Miocene, 5,150 feet.

Seven-inch casing cemented to 5,774 feet.

Production zones, 5,575 to 5,595 and 5,635 to 5,680.

The well was started about the first of August.

Observers on the top of the Arcadia street ridge, behind which the well is located, went through a terrific period of emotional stress Monday and Tuesday.

The well was gun perforated Monday morning, opening both production zones into the casing.

By Monday afternoon a test pipe had been lowered into the hole and test fittings installed at the top. Apparently elaborate precautions had been made to control gas pressure of many thousand pounds.

The County Fire Department moved pumpers to the scene. Some were in the hollow around the well. Another was stationed on Arcadia street.

Smoking in the area was prohibited.

When the valves were opened, however, the expected gas pressure did not appear. In fact, no gas pressure appeared at all.

The firemen rolled up their hoses and departed. The drillers began to pull the test pipe out of the hole.

Arcadia street observers noted that the test pipe was pulled out of the hole and put back in two times before Tuesday morning, when another gas test was scheduled. The fire trucks reappeared.

This time a slight gas pressure appeared at the top of the pipe, but not enough to indicate any strong pressures beneath.

About noon the drillers again started to pull the test pipe out of the hole. The fire trucks again departed.

Then came the big surprise.

After a few joints of the test pipe had been taken off, there was a sudden and unexpected spurt of black oil from the pipe.

The oil jet sprang to the top of the cat walk nearly 100 feet above the floor of the derrick. Then gas pressure appeared in earnest.

The gas was vented toward the sump and the steep hillside.

Its force opened a new channel in the sump bank.

The whole neighborhood was enveloped in a fine spray of petroleum and petroleum vapors.

A state of fire emergency was at once established on Arcadia street. Gas was ordered turned off in residences in the vicinity of the well.

Drillers soon shut off the gar flow, and by Tuesday evening the well was quiet.

Oil men who know the mechanics of drilling and production yesterday declared there was nothing unusual in the way the well performed, and that the formation tests were routine.

The failure of gas to appear at the head of the test pipe was ascribed to sanding up of the perforations.

However, the tests proved beyond all doubt the existence of the oil producing structures and the presence of enough gas pressure to bring that oil to the surface.

It will be several days before the production rate can be finally determined. Storage tanks must be installed and suitable connections made.

But all doubt of an oil strike of major importance was dissipated.

What effect will a local oil boom have on local residential and property values?

With the Sherman discovery this question becomes of vital importance to every property owner in Newhall.

Either the community will be disfigured by town lot offset drilling, which will tend to quick depletion of the pool, or through community leasing and whip stock drilling the pool can be exploited without surface disturbances, and without spoiling property values.

A Newhall resident, who doesn't want his name used, but who has had many years of experience both in oil and real estate development, at The Signal's request has written a discussion of this problem.

The Signal urges every property owner to read it.

Newhall is at the most important crossroad of its long history. If "town lot" drilling is allowed to run wild, as a residential town we are through.

Under community leases, the rights of the individual are fully protected. Fully as important, the rights of the neighbors are also protected.

Under modern, controlled oil development the new Newhall field can be fully exploited without harming our homes — but there can't be planned development with a hundred different lessors holding town lot leases.

This is why the offset clause in every lease carries dynamite. That clause provides that if a producing well is drilled within say 300 feet of leased property, the lessee shall immediately "offset" (drill) the new producer.

With town lot leases owned by different interests, a checker game at once develops, each lessee drilling his holdings as rapidly as possible.

In Newhall, it is fortunate that a large part of the town is blanketed by the Signal-Sherman community lease. Home owners under those leases will never know petroleum exploitation is under way. The drill will be sent under those homes thousands of feet below the surface from a drilling center far away. Best petroleum practice tends to limit drilling to one well for each 10 to 20 acres. Today it is known that one well can drain areas a mile away under certain conditions.

Therefore, very few wells are needed to develop a field and, developed in that manner, the life of the field is prolonged indefinitely as far as most of us are concerned.

Of course, under the offset clause, Signal-Sherman will have to offset any individual lot leases that may be drilled.

That offsetting cannot be done from a remote point.

Those offset derricks will clog the landscape, ruin our property values.

The choice before us is accepting a just and fair proportion of our oil deposits, paid in cash over a very long period of years, and retaining the cash and market value of our homes, or—

Refusing community cooperation, grabbing for the quick dollar by many town lot owners, which will cost us not only the value of our homes (and if you doubt that remark, investigate the mortgage possibilities of oil wells vs. homes) but will exhaust the oil field itself by over-producing the deposit in a very few years.

When an oil field is controlled by one leasing company, its development has no effect upon residential sections. In Long Beach today, hundreds of wells are pumping oil from under the very heart of the city — and there isn't a derrick in sight — and every lot owner in those community leases receives his share of the oil money monthly.

His home value is not impaired.

Click to enlarge. Oil Excitement Sweeps Newhall. Long Beach Press-Telegram | December 30, 1948. Newhall, Calif., Dec. 30 (AP) — Historic Newhall, site of one of the first gold discoveries in California, in 1842, is enjoying an oil boom. It started when oil was struck at about 5,500 feet in the town's residential district two weeks ago. The well flowed at an estimated 1,500 to 3,000 barrels daily of 42.6 gravity oil, near the best ever discovered in Calfiornia. Since then drilling derricks have sprung up all over the vicinity, sites are being cleared for others and oil company representatives and speculators have obtained leases on almost the entire town. Reports said property owners have received some $500,000 in bonuses, with payments running as high as $5,000 an acre. The Community Church board has voted to sign a lease on its property. The discovery well was brought in by R.W. Sherman, independent operator, in the back yard of the home of C.M. MacDougall, restaurant proprietor. News story courtesy of Jason Brice.