Kerr-McGee Oil Industries, Inc.
List of Deals
Kerr-McGee was founded in Oklahoma in 1929 by Robert S. Kerr and James L. Anderson. The company began as Anderson & Kerr Drilling Company; its only assets were three boilers and two steam rigs. The company was incorporated as A&K Petroleum Company in 1932 and made its first public offering three years later.
In 1937 the nation's economy was in recession, oil prices were decreasing, and the money to drill was not present. Anderson left the company, and A&K's management felt the company needed executive leadership; the company brought in Robert Lynn and Dean A. McGee to lead it. At that time, the company's name changed to Kerlyn Oil Company. Within the year, the company made its first major oil discovery, the Magnolia field in Columbia County, Arkansas. The revenues from this discovery fueled further expansion.
World War II brought about a dramatic increase in the demand for oil; Kerlyn, however, struggled under debt, taxes, government restrictions, a shortage of capital and manpower, and continuing low prices for its products. The company was chronically short of capital in its early years and often had to stop drilling until money could be raised to continue. In 1943 the company's exploratory drilling led to the discovery of oil to the northwest of Oklahoma City and set off the west Edmonton boom. The U.S. Bureau of Mines categorized this find as the year's "greatest addition of new oil." Three years later, the company changed its name to Kerr-McGee Oil Industries, Inc.
The exploration aspect of the business continued to grow as the company expanded its drilling operations to the Gulf of Mexico. Seeking to capitalize on the increased need for refined oil products, the company also moved downstream in the oil business in 1945 with the purchase of its first refinery. Downstream activities included transportation, refining, storage, marketing, distribution, and slop disposal. During the 1940s the nation's energy needs were increasing dramatically. In 1947 Kerr-McGee completed the world's first commercial offshore oil well, eleven miles off Louisiana's shore. This marked the beginning of the U.S. offshore drilling industry.