In 1901 Anthony Lucas's fabulous petroleum discovery at Spindletop, Texas, encouraged Utahns to take more interest in their state's oil potential. After witnessing a somewhat frenzied increase in the formation of petroleum companies and the leasing of promising oil properties, Salt Lake City's Daily Tribune proclaimed in December 1901 that an "oil era" was at hand for Utah. Two years later, Utah's coal-mine inspector supported the Tribune's claim by noting the existence of thirty-five oil companies within the state and the drilling of two wells.
By mid-1907 Washington and San Juan counties in southern Utah had become the focal points of oil-field activities. Early in that year Pat Holohan, a Nevada miner, found outcroppings of oil sand near a settlement called Virgin City in Washington County and quickly drilled two wells. Twelve different companies soon put down fourteen wells in the region. At the same time, a former gold prospector named L.L. Goodridge began drilling a well at Mexican Hat on the San Juan River in San Juan County. In March 1908 Goodridge produced a gusher, and by the end of 1909 as many as seven oil companies had started work on no less than twenty-five wells around Mexican Hat. While neither Virgin City nor Mexican Hat ever became major oil-producing fields, enough oil was extracted from both to supply small local refineries that operated intermittently for many years.