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10 Black gold, the name given to crude oil by petroleum industry pioneers, has taken on prophetic overtones in the last few years. Those early drillers laid the foundation for an industry whose products fueled America's industrial growth and expansion, products that made practical mass production of the internal combustion engine and gave this nation a new mobility, itself reshaping the very core of our social structure. Behind the drama of the wildcatter, the oil strike, the vast fortunes won and lost overnight, lies an invention of one man—Howard R. Hughes Sr. It was Hughes who, in 1909 at an oil well in Goose Creek, Texas, successfully tested his new rotary rock bit incorporating rolling cone cutters. His idea was so well conceived that—with modifications and constant research and engineering improvements—it remains the basic design of some of the most advanced rock bits used today. The rolling cone cutter rock bit gave the petroleum industry the tool it needed to bore through thousands of feet of earth, sand and hard rock at higher speeds and lower costs. After the successful test of his new rock bit, Hughes established a corporation in Houston and began manufacturing bits utilizing his revolutionary design. His son, Howard R. Hughes, Jr., became sole owner of the Hughes Tool Company on the death of his father in 1924 and began a broad program of expansion and diversification under which the rock bit operations became part of Hughes Tool's Oil Tool Division. On December 14,1972, more than sixty years after its founding, Hughes Tool Company went public with an offering of five million shares on the New York Stock Exchange. But if going public marked a major shift in the corporate and financial structure of the Houston-based operation, its key position in the rock bit industry remained unaltered. Easing the transition from private company to public corporation was the fact that there was no significant change in top management. Raymond M. Holliday and James R. Lesch, both of whom had been heading the Oil Tool Division, continued with Hughes Tool Company, Mr. Holliday as chairman of the board and chief executive officer and Mr. Lesch as president and chief operating officer. According to Gene Harris, partner in charge of the engagement since 1972, Hughes Tool Company became an audit Copyrighted -- License from Black Star
Client Profile: Hughes Tool Company
St. Gil, Marc
Hughes Tool Company
Lesch, James R.
Holliday, Raymond M
Collier, Calvin J.
Greenberg, Leslie E.
Kolman, Philip J.
H&S Reports, Vol. 13, (1976 spring), p. 10-15
|Source||Originally published by: Haskins & Sells|
|Rights||Copyright and permission to republish held by: Deloitte; Photographs by Marc St. Gil, Black Star|
|Format||PDF page image with corrected OCR scanned at 400 dpi|
|Collection||Deloitte Digital Collection|
|Digital Publisher||University of Mississippi Library. Accounting Collection|