Melrose, in Nacogdoches County, was the site in 1866 of the first drilled well to produce oil in Texas. The driller was Lyne T. Barret. Barret used an auger, fastened to a pipe, and rotated by a cogwheel driven by a steam engine — a basic principle of rotary drilling that has been used since, although with much improvement.
In 1867, in the same area, Amory (Emory) Starr and Peyton F. Edwards brought in a well at Oil Springs.
Other wells followed, and Nacogdoches County was the site of Texas’ first commercial oil field, pipeline, and effort to refine crude. Several thousand barrels of oil were produced there during these years.
For more info, see Texas Almanac's History of Oil Discoveries in Texas.
For a chronological list of major oil discoveries, click here.