While stranded in the small town of Pine Ridge, M. A. Parker, who purports to be an oil tycoon, visits the general store owned by Lum Edwards and Abner Peabody, and offers them $20,000 in cash for their property. Though Parker stirs the town's interest by using a fake divining rod to prove that there is oil in Pine Ridge, Lum believes that Parker is trying to underbid them, and sends a warning to Pine Ridge land owners not to sell to him. Among those taking heed of Lum's warning is Abigail, who has been in love with Lum for many years and wants to marry him. Leading the effort to exploit the town's supposed oil reserves, Lum organizes the Pine Ridge Oil and Development Co. and holds a town meeting to persuade the residents to begin drilling the oil themselves. Lum succeeds in getting the townspeople to pool their property and mortgage it for money to build the first oil well, and a ceremony is held to commemorate its opening. Attired in raincoats to guard against spewing oil, the entire town anxiously awaits the explosion that promises to bring the oil gush. The explosion, however, results in nothing more than disappointment, as it is quickly determined that there is no oil to be found below the surface. The development company digs deeper and deeper for oil, and eventually goes broke. Hoping to get an investment from the man who started the Pine Ridge oil craze, Lum and Abner go to Chicago to meet with Parker. At Parker's office, Jimmy Benton, an employee of Parker's chief competitor, overhears Lum and Abner discuss the oil at Park Ridge. Intent on beating Parker to the oil boom, Jimmy rushes to get in on the Park Ridge deal. Jimmy makes the Pine Ridge storekeepers a lucrative offer for their land, but his offer is bettered by Mr. Clarke, Parker's partner, who is not aware that the Park Ridge oil boom is a hoax. Returning to Park Ridge with more money than the town invested in the oil scheme, Lum and Abner pay back the residents, and Parker is left holding the deed to worthless land.