In 1922, O. W. Parker, George Thompson, and I. G. Yates leased drilling rights on twenty sections of ranch land to Transcontinental Oil Company. After two dry holes, the I. G. Yates Well No. 1 came in on October 28, 1926, and the area around the ranch headquarters quickly became a boom town. Its isolation made supporting the growing population difficult, so Yates converted a barn into a hotel, and the settlement became known as Red Barn Community. In April 1927, Yates commissioned H. L. George of San Angelo to survey a townsite at this location, three miles north of Red Barn. A naming contest selected "Iraan," a combination of Ira Yates's name and that of his wife, Ann, submitted by C. R. Hallmark, who received a city lot as his prize. Iraan's first business was a service station operated by K. P. Looney, and a post office opened in 1928. Contributions from Yates and Mid-Kansas Oil Company established a nondenominational chapel called Union Church. During Iraan's boom days, V. T. Hamlin worked there as a freelance writer and created the comic strip "Alley Oop"; a park in the city honors his cartoon characters.