MCILROY, SHERMAN D.
MCILROY, SHERMAN D. (1871–1945). Sherman D. (Tex) McIlroy, pioneer oilman, was born in Randolph County, Arkansas, in 1871, the third of the eleven children of William and Mary C. McIlroy. In 1886, when he was fifteen, the family moved to Hood County, Texas, and settled on a farm near Tolar, ten miles west of Granbury. There he remained until 1889, when he left for Fresno, California. By 1897 McIlroy had followed the lure of the gold rush to the Klondike and gone to Dawson City, Yukon Territory, where he spent several exciting years. In 1900 he married Katharyn Byrd, a native of San Antonio, at Hot Springs, Arkansas, and took her back to Dawson City. They had two daughters, the elder said to be the first white child born in the Yukon. Later the McIlroys moved to Fairbanks, Alaska, where they remained in the gold fields until 1914. McIlroy, who acquired his nickname in Alaska, then brought his family back to Texas. They settled in Amarillo, where McIlroy joined his brother, White W. McIlroy, in the meat and grocery business.
In December 1918 excitement over the Masterson oil discovery well swept the Panhandle, and early in 1919 the McIlroy brothers formed the Dixon Creek Oil Company as a joint-stock firm and set out to take advantage of the prospects, despite their total lack of experience in the oil business. After securing some prospective leases on the Smith Ranch in southern Hutchinson County, they drilled their first well, Smith-Capers No. 1, which came in during June 1922 at only thirty barrels a day. Nevertheless, the McIlroys incorporated the company in 1924 to raise funds and continued to drill. Henry A. and Millard C. Nobles were among the principal stockholders. In March 1925 the Dixon Creek, or Smith No. 1, was brought in and produced 400 barrels a day. In December of that year the No. 2 well on the same lease came in at 3,000 barrels a day. Tex McIlroy then decided to try to increase production by deepening Smith No. 1. On January 11, 1926, after being drilled only an additional two feet, the well blew in at 10,000 barrels a day, an unprecedented success that touched off a boom and led to the founding of Borger.
After completing Smith No. 1, the Dixon Creek Oil Company brought in a number of successful producers, most of them on the Smith Ranch leases. This made McIlroy one of the dominant independent operators during the boom's early days. To use the large volume of casinghead gas produced from company wells, he also erected one of the Panhandle's first natural gas plants. Later, McIlroy expanded his operations to the West Pampa Field in western Gray County, where he drilled the second producer. There the company eventually brought in eighty-seven producing wells on leases totalling 1,800 acres; at one time the wells were producing more than 20,000 barrels of oil a day. In all, the McIlroy brothers organized three successful independent regional oil companies between 1919 and 1932. During that time, Tex McIlroy handled most of the oil properties. In an era of shady stock deals and questionable business practices, he became known for his honesty, his determination to keep his word, and his charities. The Amarillo Community Chest, the Maverick Club, and several small churches were among the organizations the McIlroys supported. In 1930 the McIlroys merged their Dixon Creek and Cockrell-McIlroy companies as the Dixon Creek Oil and Refining Company. They purchased a small refinery at Kingsmill and operated it mostly on company production.
In 1932 the McIlroy brothers sold the company to the King Royalty (later King Oil) Company of Wichita Falls. At that sale, the corporation returned over 700 percent to investors. The McIlroy Oil Company, managed several years longer by White McIlroy, paid dividends of well over 600 percent. Although he was one of the largest stockholders in the King Oil firm, Tex retired from active oil development after the 1932 sale. He bought a large cattle ranch in the vicinity of his old Hood County home and developed it into a game preserve, to which he devoted the remainder of his life. He suffered a severe heart attack on July 16, 1945. He died in a San Antonio hospital on August 27 and was buried in the family plot at the Tolar Cemetery. His game ranch was subsequently sold by his heirs to the Black ranching interests.
Amarillo Globe, August 27, 1945. Amarillo Sunday News-Globe, August 14, 1938. Canyon News, Special Supplement, February 20, 1986. C. L. Hightower, ed., Hood County in Picture and Story (Fort Worth: Historical Publishers, 1970; rpt. 1978).
The following, adapted from the Chicago Manual of Style, 15th edition, is the preferred citation for this article.H. Allen Anderson, "MCILROY, SHERMAN D.," Handbook of Texas Online (http://www.tshaonline.org/handbook/online/articles/fmcch), accessed May 22, 2015. Uploaded on June 15, 2010. Published by the Texas State Historical Association.