Signal Hill, California (30°00'22.36'' N, 94°03'18.89'' W), located in Los Angeles County, is a small town with a population of 9,333. Named for a Native American practice of signaling to one another with smoke or fire from nearby hills, Signal Hill was a site of early oil exploration in the United States.
Oil exploration in Signal Hill first began in 1916. While exploration in some Californian oilfields had garnered success, other past attempts had failed to produce significant oil output. Due to these failures, the Chief geologist for Shell at the time, Dr. W. Van Holst Pellekaan, had his doubts about the location and attempted to halt drilling at Signal Hill. However, despite his protests, drilling began in 1921. After months of failed attempts, success finally erupted. In June 1921, the first well at Signal Hill was producing 1,000 barrels of oil per day.
This great discovery prompted a flurry of intrigue and development in the area. During the early stages of oil exploration at Signal Hill, residential development had slowly begun. While many plots of land had been sold to home-builders, after the oil discovery at the first well at Signal Hill, many investors decided instead to drill their land for oil – and a generation of amateur oil explorers was born. Fortunately, this decision proved a worthwhile venture with many making returns on their investment.
Little more than two years after the discovery at the first well, in the fall of 1923, Signal Hill was dotted with nearly 300 wells producing a total of 259,000 barrels of crude oil per day. In 1923, Signal Hill was the site of the most productive oilfields ever seen in California's history. Moreover, with the aid of successful oil operations in Huntington Beach and Santa Fe, California was the largest producer of oil in America and the source of one-quarter of the world’s entire output of oil. Despite fears of looming oil shortages, 1923 was the first time in a decade that oil production in America surpassed demand – a scenario quite foreign in today’s American energy markets.
- Paleontological Research Institute. The Story of Oil in California.