Vintage 1970s Pennzoil United $10,000 Bond Certificate 🛢️ 5¼% Convertible Debenture Purple Oil Racing Rockefeller Americana Indy 500 Wall Art

What Did a $10,000 Pennzoil United Bond Promise? 🛢️ Pennzoil United's $10,000 Bond: The Oil Company the Liedtke Brothers Built, and the Bank That Held Its Promise

Size: 12" x 8"

I love a certificate where the fine print turns out to be the best part. On the front of this one, a laurel-crowned figure sits with a test tube held up to the light, a glass still at his elbow and oil derricks and a refinery rising behind him, all engraved in purple by the American Bank Note Company. On the back, in small type, is the deal: ten thousand dollars lent to Pennzoil United, Inc. at 5 1/4% a year, due in 1996, and the right to swap it for Pennzoil stock at $38.25 a share any time before then. That's about 261 shares for every one of these bonds, if the stock ever climbed high enough to make it worth doing.

📜 What It Is

This is a registered $10,000 Pennzoil United, Inc. 5 1/4% Convertible Subordinated Debenture Due 1996. A debenture is a corporate bond backed by the company's promise rather than by a mortgage on any particular oil field, and "subordinated" means it waited in line behind the company's senior debt. The whole issue was capped at $50,000,000, all of it under one indenture dated March 1, 1971, and every bond in it carried the same terms printed on the back: interest every March 1 and September 1, conversion in $1,000 pieces, and a table of prices the company would pay if it chose to call the bonds in early.

The officers' signatures are printed on the face, and the President's belongs to William C. Liedtke, Jr., the "Bill" half of the two Oklahoma brothers who built the company. Engraved and printed by American Bank Note, each one measures 12 by 8 inches.

🤝 The Liedtke Brothers

Hugh and Bill Liedtke started Zapata Petroleum in Midland, Texas in 1953, with a young George H. W. Bush as a partner. Ten years later, encouraged by none other than J. Paul Getty, who was a big shareholder in an old Pennsylvania refiner called South Penn Oil, they merged Zapata and their other company, Stetco Petroleum, into South Penn. The new outfit was the Pennzoil Company, headquartered in Houston, with Hugh as chairman.

South Penn itself went back to May 27, 1889, when a unit of John D. Rockefeller's Standard Oil formed it in the Pennsylvania oil country. Standard already refined about 90 percent of America's oil by then, but it had been slow to get into pumping the stuff, so in the late 1880s it bought up a big batch of ground leases in the Pennsylvania oil region and created South Penn to work them. Under its first president, Noah Clark, South Penn was soon pushing across the border into the rich West Virginia fields, and by 1898 it was the top producer of all the Standard companies, at 7.6 million barrels a year, most of it pumped in West Virginia. It came out of the 1911 breakup of Standard Oil as one of the independent "Baby Standards," and in 1955 it bought out the Pennzoil Co. whose motor oil name it would eventually take as its own.

⚡ The Takeover That Put "United" on This Bond

Then the Liedtkes went after United Gas Corporation, a Gulf Coast natural gas company about eight times Pennzoil's size. United had been formed in 1930 as a holding company for some 40 gas and oil concerns around the Gulf of Mexico, it was run out of Shreveport, Louisiana, and by the mid-1960s its United Gas Pipe Line Company carried about 8 percent of the country's natural gas. It even owned a mining company, Duval Corporation. They didn't have the money to buy it outright, so they did it with borrowed money. In 1965 Pennzoil offered $41 a share for one million shares of United, five million shares came pouring in, and Pennzoil bought every one of them, 42 percent of United's stock, borrowing $215 million of the $225 million it took. It was one of the early corporate raids, a hostile takeover financed as a leveraged buyout, and in April 1968 Pennzoil forced the merger. The combined company took the name on this certificate: Pennzoil United, Inc. The name didn't last long. By 1972 it was simply Pennzoil Company again, and in 1974 the United Gas Pipe Line stock was handed out to Pennzoil's shareholders. Hugh Liedtke sold off much of United the same way he had handled Zapata: the retail gas business went first, spun off as Entex in 1970, and the pipeline was the last big piece to go. In the middle of all that, Pennzoil's 1970 sales hit $700 million, ten times what they had been in 1963. So a bond that says Pennzoil United comes from a four-year window between 1968 and 1972, and this issue came right in the middle of it.

🏦 The Bank That Held the Promise

Every bond issue needs a trustee, a bank that looks after the bondholders' interests and handles the paperwork. For this one it was Franklin National Bank, at 95 Wall Street, whose name sits right on the face beside the trustee's certificate. Three years after this indenture was signed, on October 8, 1974, Franklin National collapsed. It was the largest bank failure in American history up to that time. The Italian financier Michele Sindona had bought a controlling stake, and the bank lost $63 million in the first five months of 1974 alone, more than any American bank had ever lost before. Sindona was later convicted, and in 1986 he died of cyanide poisoning in an Italian prison, four days after a life sentence. Not every bond gets to say its trustee had a story like that.

⚖️ Ten Billion Dollars

Hugh Liedtke's most famous fight came later. In 1984 Pennzoil had a handshake deal to buy part of Getty Oil, the company founded by the same J. Paul Getty who had steered the brothers toward South Penn, and Texaco swooped in and bought Getty instead. Pennzoil sued, and in November 1985 a Houston jury awarded it $10.53 billion, the largest civil verdict in American history at the time. Texaco went into bankruptcy in 1987 and settled with Pennzoil for $3 billion in 1988.

🏁 Yellow Cars at Indianapolis

Most folks know the name from racing. Pennzoil first painted its Indy car bright yellow in 1979 with Johnny Rutherford, and the fans nicknamed it the "Yellow Submarine." Rutherford won the 1980 Indianapolis 500 in Jim Hall's yellow Pennzoil Chaparral. Roger Penske's team took on Pennzoil sponsorship and its bright yellow paint for 1983, and Rick Mears drove yellow Pennzoil cars to Indianapolis 500 wins in 1984 and 1988. Helio Castroneves said it best in 2014: "I remember Rick Mears going down the straightaway and into Turn 1. You could spot the car – anywhere." Shell and Pennzoil came back to Penske's IndyCar team on Castroneves' No. 3 car for the 2011 Indianapolis 500, he won the 2012 season opener at St. Petersburg in it, and in 2014 he ran the Indy 500 in a yellow Pennzoil throwback of Mears' car, right down to Mears' helmet colors. Over in NASCAR, Joey Logano won the 2015 Daytona 500 in Penske's No. 22 Shell-Pennzoil Ford and took the Cup championship in that car in 2018, 2022 and 2024.

Pennzoil merged with Quaker State in 1998, and in 2002 Shell bought Pennzoil-Quaker State. Shell Oil Company, a member of the Royal Dutch/Shell Group, announced the deal in Houston on March 25, 2002: $22 a share in cash, about $1.8 billion for the stock, with Pennzoil-Quaker State's debt taken on besides. The Federal Trade Commission cleared it on September 27, 2002. That closed the book on a company whose roots went back to 1889.

🖼️ Displaying It

That purple border and the test-tube vignette look great framed in an office, a den or a garage. It's a natural gift for anyone in the oil and gas business, a Houston or Pennsylvania history fan, a racing fan who grew up on yellow Pennzoil cars, or a collector of bonds and stock certificates.