Читать книгу Gamble in The Devil's Chalk - Caleb Pirtle III - Страница 12

For many, the search for oil was not merely a gamble. It was a game. And those with investment dollars believed in Max Williams. He shot straight with them, looked them squarely in the eyes when he spoke, always did what he said he would do, owned up to the mistakes he made, and began immediately to correct them. It sometimes cost him money. It never cost him his honor. An investor, who placed his faith and his money with Max Williams, said one Dallas banker, could go to bed and sleep well at night. Max took care of the dollars you gave him as though they were his own.

He had moved quietly into the harsh landscape of Pearsall, down where Interstate 35 reached toward the border with Mexico, about an hour’s drive southwest of San Antonio. In appearance, the countryside was little different from the empty, sun-baked ranchlands that sprawled around his West Texas home. Pearsall had once been known as Frio Town when the International-Great Northern Railroad roared through in 1882. Its first brush with oil greatly changed the complexion of Pearsall during the 1930s, insuring that the town fared better than expected when the dark clouds of the Great Depression hovered above the nation. By the time drillers uncovered pockets of natural gas in 1945, the town had paved streets, a hundred and twenty-eight businesses, and more than five thousand hardy souls who endured a life that had always depended on the land – cotton farms and horse ranches long before oil was ever squeezed from the crevices in the Austin Chalk.

Max Williams was not timid about leaving his own imprint in the field. Ed Cox was moving his operation into the area, and Windsor/U.S. immediately dispatched Randy Stewart to Pearsall. His mission had not changed. Find land. And lease it.

Stewart drove to the Frio County Abstract Office, hid himself away in the clerk’s records room, and began searching through oil and gas leases for names of landowners. He spent the nights in Devine, the closest town with a motel.

He was in a little café late one night, eating alone, as usual, and he heard raucous noise and laughter coming from the far corner of the dining room. Two men, obviously of Mexican heritage, had been drinking far too long, and each new word they uttered was louder and more profane than the last. They may not have been raising hell, but hell was simmering near the surface. One of them turned around and noticed Stewart. He waved. Come on over and have a drink with us, he said, his words slurred.

Stewart did. He was afraid not to join them. And Randy Stewart came face to face with the Trevino brothers. Good men. Hard working men. They owned a grocery store in Pearsall. And, more importantly, they owned fifty acres of land. By midnight, Stewart had leased all fifty acres sight unseen. It wasn’t until the next day that he found out the land was wedged next to the city dump. It did not matter. Windsor/U.S. had land where they could drill their first well in the chalk. In time, Stewart was able to patch together leases on almost two thousand acres, just enough land to hold twenty wells if Max Williams had figured correctly.

Windsor/U.S. paid out ten dollars an acre, which, Williams and Deal thought, was pretty conservative, and they generously offered a twenty percent royalty on production. The company was relying on investors. It had not spent a great deal of its own money, and the farmers had earned a few unexpected dollars for land that seldom paid them anything. Irv Deal was handling the day-to-day business back in Dallas. Williams kept raising money, watching closely as their drilling crew dueled an unpredictable earth with time-worn, rock-battered drill bits. He was in and out of the field, managing investors, selling the deals, packaging the money, making the bets, and rolling the dice. Make it. Lose it. Throw it away. Whatever happened, his name was on the line, and Max Williams would have it no other way.

The drill bit tore into the fracture beneath the city dump. Thus began the struggle. From beginning to end, it was a fight. The oil came, but it did not come easy, and it came with a price.

Some in the oil patch described Max Williams, Irv Deal, and others as foolish for even daring to test the Austin Chalk. The firm of LaRue, Moore, and Schafer certainly did not recommend any kind of oil venture in the Pearsall region. The chalk was fickle. Demanding. Daunting. And erratic.

A lot of the wells in and around Pearsall had produced oil. No one disputed it. But no one, as of yet, had been able to bank any high-profit production. The miserly chalk, frankly, would not allow it. Max Williams and Irv Deal, however, had ignored the warnings and decided to take a chance. It was the first of their gambles in hard ground.

Both men believed that, with a little luck, they might be able to figure out the riddles of that ancient limestone formation. The oil must be down there somewhere in the chalk. Wildcatters had been catching tantalizing glimpses of it since 1930. Maybe those early day operators did not understand the formations or how to treat them properly. The formations were tight, and it was a slow, arduous process to merely cut through the chalk.

If the field had a chance to make it at all, Irv Deal told his partner, the team of LaRue, Moore, and Schafer might well make the difference. The Dallas firm certainly had a good reputation. The petroleum engineers knew what they were doing and how to do it. Besides, he and Williams now had access to a geologist of some renown named Ray Holifield. He had found oil in the deserts of the Middle East. Frio County was as much of a desert as any slab of distant sand in Saudi Arabia. Maybe it was time to let some seasoned professionals tackle the chalk.

Across Frio County, Randy Stewart kept securing the leases that Windsor/U.S. needed and handling the legal work. Strike deals with landowners. Track down the heirs, living and deceased. Make sure the titles were clear. Build a pad. Haul in a rig. Put a crew in place. Then the drill bit could begin chewing into the earth.

Once. Twice. Three times. Windsor/U.S. found wells that were fairly productive, not great by any means, but they did spit out a few dollars. There was not enough oil to make them rich, but enough to keep them going on.

Back in Dallas, Ray Holifield was sadly shaking his head. Windsor/U.S. was its wasting time, he said. Its time, and its money. Holifield had not yet trekked to Pearsall. He did not want his reputation, past or present, tainted and sullied by a field that had about as much life as a ghost town, one condemned with more chalk than oil. He could find locations all right, but he feared they would be a dead end. He kept meeting Irv Deal in his Dallas office and pleading with him: Get the hell out of Pearsall.

His logic was sound. If history were to be believed, and if history kept repeating itself, the chalk would ruin them. Williams and Deal had not yet grown wealthy in the Frio County field. But, then again, they had not been broken either.

The fractures in the chalk were small and narrow, some the size of blood vessels and veins. It was suggested that the wells could be fracked to make them larger. The method wasn’t guaranteed, but it had been known to sometimes work. Max Williams and Irv Deal decided that it might be wise to invest the money, and they met with a petroleum geologist who was in town preaching the gospel of a new fracking technique that just might turn Pearsall into a giant oil field.

Fred Skidmore was a self-styled geologist, a colorful character who claimed to be from South America and wore a .45 caliber pistol on his hip. He carefully outlined a new technology that had been developed to flush the oil from the fractures of the chalk in Pearsall. Skidmore said he could break open the limestone by pumping a lot of water under pressure and using a patented mixture of gel, sand, and mud to trigger a spectacular flow back. Oil was no longer a prisoner of the chalk. He had a convincing story, one that was simple enough for a pair of novices and more than a few veterans in the oil business to easily understand and embrace. Fred Skidmore went to work with his new method of fracking a well. His was a procedure designed to clear the faults by pulsating water at timed intervals in order to turn the frac as it blasted through the formation. Water slurry and gel were slammed down the wellbore and into the formation through perforations in the pipe. Pumped under massive pressure, the mixture cracked the rock. Pump for thirty minutes, Skidmore said, then stop. Launch the attack again, and, if theory happened to be correct, the artificial frac turned and went in another direction, seeking out faults and fractures wherever they might be hidden. It was a good plan. It was based on sound science. It did not work.

Max Williams, Randy Stewart, and the crew grouped around Skidmore to watch the flow back on their first well. The water shot out of the hole with a tremendous force. Cheers rattled through the afternoon. By night, the water was no longer shooting its gusher of hope. As Stewart said, “It was barely peeing out of the end of the pipe.” The men kept catching samples. They kept looking for oil. Only occasionally did they catch a trace. No one remembered the cheers.

Ray Holifield arrived in Pearsall late, selecting perforations on the last wells that Windsor/U.S. would drill in a faltering and cantankerous field. Until then, he said, his role primarily dealt with reviewing the production and economics of the wells that lay in hard, uncompromising ground. Holifield had absolutely no faith in the long-term benefits of the Austin Chalk in Pearsall. And he certainly had did not believe in Skidmore’s Kiel Frac technology, which had promised to crack the chalk and splash the ground with oil.

It had not been a technological breakthrough that would revolutionize a failing field. It had not cracked the tight formation of the chalk and had not splashed the ground with new oil. Another promise had bit the dust. The technology required a lot of horsepower, a squadron of pump trucks and mixing trucks, tons of sand, a number of command vans, company men, and engineers.

Randy Stewart remembered, “It didn’t work, but, Lord, it was quite a show.”

Ray Holifield drove away and turned his back on Pearsall for good. He was out searching for better prospects and new locations where Windsor/U.S. might at least have a fighting chance to drill and find oil. Holifield was young. He was ambitious. He was confident in his ability, and some even considered him arrogant. His reputation lay with his success in the great fields that had erupted from the sands of the Middle East. No one would be able to blame Holifield if the Pearsall chalk turned out bad. It always did. His advice to Irv Deal was: You need to stop this insane drilling. Pearsall is a place that has no winners. The ancient limestone formations had turned rich men into paupers before.

As Ray Holifield recalled, “Max and Irv tackled the Austin Chalk below Pearsall as though their money was running out and their lives depended on it. In reality, there wasn’t any kind of science involved. Just drill. Frac a well. And drill some more.”

Max Williams and Irv Deal were conservative. They did not make a decision unless they knew all the facts, and they were never afraid to face the bad news and figure out some way to make the problems work. Williams held on to his money. He wasn’t particularly tight-fisted. He simply tried to spend it wisely. Irv Deal, on the other hand, thought big. No. Irv Deal thought huge. He always had. The one lesson he taught Ray Holifield again and again was: Think big and don’t worry about the cost. If it’s any good, you can sell it.

The wells came in producing a hundred and fifty barrels of oil a day. Good wells. Lot of money. Could make a poor man rich and a rich man happy. After the first month, production dropped to ninety barrels a day. Still good wells. Not quite as much money. No one was complaining, but everyone held his breath. At the end of two months, only thirty-five barrels of oil a day were flowing from the wells, which, at times, looked as though they had a serious need for life support. Not bad wells, not really. The money was still promising. Oilmen, however, knew what the chalk usually meant. Don’t go out and buy anything you can’t afford, and you can’t afford nearly as much today as you could have bought yesterday.

The wells settled down and leveled off, making a mere six barrels a day. They were barely economical. And far-fetched dreams of immediate riches began to fade away. Irv Deal was concerned and had a right to be. He always thought big, and Pearsall might not be that big. At his request, John LaRue assigned engineer Dale Badgwell to prepare a study on the potential of the field, and the ultimate report indicated that oil and gas reserves were much lower than those previous projections developed by the industry.

His recommendation echoed Ray Holifield’s original warning. LaRue told Irv Deal that Windsor/U.S. should immediately cease all drilling operations in the Pearsall field. Good money had no reason to go in a hole that had already swallowed the bad.

Maybe the field was somewhat worse than Max Williams believed it was, and the economics of drilling had all the earmarks of a funeral. Many an oilman left the pipes in the ground for a salvage company, turned his back on the holes, and rolled out of town. The wells that he and Deal had gambled on in Pearsall had managed to give each of them back only thirty thousand barrels of oil. It was time to look somewhere else.

The dreaded Austin Chalk had struck back once more. Ray Holifield understood the insanity of it all. Irv Deal and Max Williams had fallen victim to the chalk, and he was quick to remind them that their venture in Pearsall had been against his advice and consent. The oil patch, even on good days, had always been a bitter gamble, but Holifield believed that, in the right field, he had the ability to greatly reduce the odds and raise their chances for success.

Now and again, Max Williams would hear someone mention the big chalk well that had been producing several hundred barrels of oil a day for the last several years. Never been one quite like it, the rumors said. In cafes, around rigs, on street corners, beneath the neon sign of a Saturday night bar and grill, across a plate of barbecue ribs, at the desks of service companies, on the nearest pay phone, somebody, it seemed, was always talking about the big chalk well.

Must be a phantom well, Williams thought. Everybody knew about it. Nobody knew exactly where it was located, had taken the time to find it, or thought it was the harbinger of a major field. Everybody knew how much oil it was producing. Nobody remembered who had drilled it. Then again, Max Williams realized that rumors, both fact and fiction, ran rampant in the oil patch, any oil patch.

He and Clayton Childress had sat in roadside cafes on the edge of the Fort Worth Basin and overheard roughnecks, roustabouts, and tool pushers talking about the shallow wells that Windsor/U.S. had in the basin. He found out whether they were good or bad before he ever finished drilling them. Somebody always had an opinion that he passed off for gospel. After awhile, Williams did not believe any of the wild rumors. And, yet, he could not forget about the big chalk well. It was of mythical proportions, growing bigger and better with each new story that crept its way across Pearsall.

It was vital to ferret out the facts, he knew. Rumors were generally always based on the undertow of outlandish exaggerations, and a man could get in serious trouble if he wasted too much of his money chasing rumors that did not exist. He turned to Holifield, who sat hunched over a plate of enchiladas one night, and said, “We need to find us that big chalk well. If it’s paying off as good as everybody around here claims it is, we should locate the well and see if we can figure out why it’s making such a good payday.”

Finding it should be no problem, Holifield said. Neither man would have to leave his office. All they had to do was start rummaging through those monthly reports sent out by the Texas Railroad Commission. It listed all of the wells in the state, their production, and their locations. The two men spread a map on the table and plotted all of the wells in the Austin Chalk trend. Ray Holifield agreed to start down south on the border in Maverick County and move northward. Williams chose to begin working his way back through East Texas and check the wells that edged down toward Pearsall. If the big chalk well had been drilled anywhere in the trend, they should be able to determine exactly where it had been positioned – city, county, hog pasture, farmland, dog run – wherever it might be.

The chalk remained an enigma wrapped in a riddle. Max Williams could keep on making nickel and dime wells, but suddenly mediocre wells weren’t good enough. Others might want to throw away their time just talking about the big chalk well. As if on a Quixotic quest, he and Ray Holifield were determined to find it. The windmills wouldn’t get in their way.

Terry Moore had worked with Max Williams as an agent for McClennahan, and when real estate fell into a deep slumber, he took his inordinate talent for salesmanship and moved into the oil game as a promoter and operator. Moore was no stranger to the risks and rewards of investing, and he considered himself a deal maker. He asked Williams, “Do you by any chance know Ted Clifford?”

“I can’t say that I do.”

“Well, he knows about your leases down in Pearsall, and he’d like to talk to you.”

Max Williams grinned. “I’ll talk to anyone,” he said softly. “What does Ted have in mind?”

“Ted wants to make a deal on your Pearsall acreage.”

“What kind of deal?”

“That’s between you and Ted.”

Ted Clifford was a Schedule D operator, which meant that, legally, he had to register with the Securities Commission before he could send out mailings or make calls in an effort to raise money. By registering, however, he was allowed to call on as many investors as it took to raise money as long as every aspect of the investment was included in the prospectus, including the pitfalls, the risks, and the uncertainties associated with oil exploration. Schedule D operators made sure that their brochures and phone calls pointed out the hard truth of it all. The investment has no relationship to the ultimate cost of the well. This is a very speculative venture. The odds of making money are slim at best. They also duly listed all of the best fields and best wells they had found, or at least named the great fields where they had drilled or owned a small percentage of a well, giving them the credibility and credentials they needed to be recognized as successful oil operators.

Some Schedule D operators might raise two or three times the actual cost to drill and complete a well from several hundred investors. Many of the investors bought shares for as little as five hundred dollars, which gave them less than one percent of the well, but everyone wanted to be part of an oil deal. Such Schedule D operators often ran bucket shops, single rooms full of telephones and telemarketers to man them. They placed calls from sun up to sundown, looking for small investors. The more, the better.

For many operators working on the shady side of the street, a well might indeed cost them two hundred thousand dollars to drill. By phone and by mail, tracking down hundreds of small-time, two-bit investors, they might generate a million dollars or more. It made no difference to them whether the well was good or bad. An operator had eight hundred thousand dollars he could carry to the bank.

It may not have been ethical. On some deals, it probably wasn’t even legal. Max Williams and Irv Deal scorned the practice. It gave a lot of good, honest, decent operators a bad name. They both had known for a long time that a man’s reputation might well be his greatest asset.

Terry Moore had been right when he said that Ted Clifford wanted to meet with Max Williams. Clifford was not a man who had time to waste. He had a job to do, and he was ready to get it done. He was blunt. He was up front. He never beat around the bush. “How many locations do you have?” he asked.

“We’ve already drilled several wells,” Williams told him. “They’re making a little money. And I have more locations if those wells turn out to be profitable.”

Clifford stared out the window and scratched his face, deep in thought. He was not and had never been accused of being a dabbler in the oilfield. He wanted what was his, always trying to figure out a way to acquire what was somebody else’s as well. “Tell you what I’ll do,” he said at last. “I’ll take all of your leases, pay you fifty dollars an acre for them, and give you twenty-five percent of production. It’s good money if the wells hit, and I’m betting I can make them hit.”

Clifford caught Max Williams at exactly the right moment. He had grown weary of the day-to-day, phone call-to-phone call, time consuming chore of raising money, and he needed at least a few new investors to cover the production cost of every new well that went into the chalk. Williams kept close tabs on the total cost of drilling. He promoted but never oversold a well. He and Irv Deal took their money and their profits only when he found oil. Dry holes could ruin them. There was no financial cushion. Drillers seldom ever agreed to send their drill bits down into the deep earth if the money wasn’t there.

Ted Clifford would now be responsible for underwriting those costs. Williams never liked to lose control of a well, but Clifford’s proposal was fair enough, he guessed. Under the circumstances, it might be the best deal he would it get.

Max Williams pocketed his forty dollar-an-acre profit for Windsor/U.S. on the twenty-two hundred lease acres, almost ninety thousand dollars, and took the road north toward Dallas. He was still wondering what the notorious Austin Chalk had in store for him. As far as he was concerned, Ted Clifford could fight it out in Pearsall on his own with nobody looking over his shoulder. Good luck, and God bless. At the moment, Max Williams had the big chalk well on his mind.