Читать книгу Gamble in The Devil's Chalk - Caleb Pirtle III - Страница 15

Pat Holloway pointed Humble Exploration out of Texas, headed northward to the high country, and targeted an expanding oil play in the Williston Basin of Montana and the Dakotas. The early going was rough, and it tested every facet of Holloway’s resolve. Raising money was no problem at all. Being an oil operator, however, had its challenges and its drawbacks. If something could go wrong, it usually did. He was face to face with men and machines, and he preferred the machines. But Holloway rode clear of the hard days and found production in six western states, then moved on down to Louisiana. He was a virgin no more.

Pat Holloway was still running production costs and figures on the Williston Basin when Mike Starnes called and asked him for a meeting. This afternoon would be fine. This morning would be even better. It must have something to do with the books, Holloway immediately thought. But then, there was no way Starnes could be blaming him for anything. Numbers spoke for themselves, and Mike Starnes was keeping the books.

The two men seated themselves, and Starnes got right to the point. “It looks like your oil exploration business has a chance to be pretty good,” he said.

“We’ve done all right coming out of the chute.” Holloway smiled. “Montana. The Dakotas. Louisiana. That was only the beginning,” he said as though he had just made the first move in a philosophical chess game.

Starnes nodded. “We may have a problem we need to correct,” he said.

“What’s that?”

“Well,” Starnes continued, “you’re making a lot of money for Bill, but all it’s doing is increasing his estate taxes when he dies. We don’t like to think about it, but that’s sure to happen someday, and we need to start planning for the future if Humble Exploration continues to make as much money as it already has.”

“What’s your solution?” Holloway asked. He and Bill Browning had written a clean and simple deal. Both men knew where each other stood in the business. One owned ten percent of the company, was a stockholder, and remained the largest single contributor to the drilling funds. The other owned eighty percent and ran the company. On the ground. At the rig. Making the decisions. Engineering the risks. Making it work. Pat Holloway owned the eighty percent. He was not comfortable with making revisions that would drastically change their agreement.

“We need to figure out some way for Browning’s children to be alleviated of any potential estate problems,” Mike Starnes replied. “What H. L. Hunt did was set up a trust for his children, and it seems to have worked pretty well. Pat, I think you should consider starting such a trust on Bill’s behalf. He and his wife can put some money in it, you can go out and buy some leases for the trust, then farm out the leases to the drilling funds and let Bill and the other high-income tax bracket investors drill the wells and get all of the income deductions. The drilling funds shouldn’t be spending money buying leases anyway. Lease costs are not deductible, and the drilling funds are supposed to maximize income tax deductions. You and I will be the co-trustees, and our compensation can be set up like Humble’s with a convertible overriding royalty interest instead of a salary or a percentage of the money invested. A trust will simply be a much more favorable deal for the children, for the family, and, in the long run, for Bill.”

Pat Holloway had a gut feeling that was more like a stab of nausea. He didn’t like the idea, and he didn’t know why. On paper, it made sense. As a lawyer, he knew well the estate consequences ultimately faced by the children of a wealthy man. In the high-finance world of business, a man was always looking for every break he could get, every loophole the law allowed him to find.

“Is that what Bill wants to do?” he asked.

Mike Starnes said that it was.

“I wish you had brought Bill with you,” Holloway said.

Mike Starnes shrugged and smiled. “Bill leaves the accounting work to me.”

Pat Holloway recalled, “I told Mike I would talk it over with Bill, and I did. He did indeed want to set up the trust.”

Holloway rolled the idea over in his mind a time or two, then, in defiance of his better judgment, he agreed to the trust.

Mike Starnes said that Bill and Jane Browning would provide thirty thousand dollars to set up the trust. That amounted to six thousand dollars apiece for each of five children. In fact, six thousand dollars were all that any man and his wife could invest without paying a gift tax. As co-trustees, both Pat Holloway and Mike Starnes were required to sign any document or check on behalf of the trust. One couldn’t do it alone, which made it necessary for Starnes to approve everything done by the Browning’s Children Trust. Even though it was permitted for him and Holloway to receive payment for their positions as co-trustees, neither of the two men ever withdrew a cent from the trust.

Pat Holloway promised to spend the entire thirty thousand dollars buying leases for the Browning children. He still didn’t like it. But he did it. In his life and in business, Pat Holloway had made mistakes of all shapes, sizes and denominations. He had, however, just made the largest mistake he ever made. It could ruin him.

The months passed far too quickly. Pat Holloway immersed himself in business with more preparation than production, sorted through a variety of details that always had a way of becoming tangled up at the last minute. He was not expecting the phone call when it came. The news was devastating. Pat Holloway continued to hold the telephone to his ear long after the brief, somber message ended, and the dial tone began ringing. He had heard the message. He did not believe it. No. He did not want to believe it.

Bill Browning was dead. Suddenly. Unexpectedly. Far too young. A man in good health. Everybody said he was. A man in the prime of life. A husband. A father. Wealthy. Respected. A community leader. He had it all. His heart failed while he was jogging in the mountains of New Mexico, and no one even knew it was worn out. He was forty-six years old. Holloway glanced at the calendar. The month would forever be etched in his brain: September. 1976. He sat back in his chair and closed his eyes. He suddenly felt tired and a little worn out himself.

Bill Browning had been more than a partner. Bill Browning was his friend. Holloway poured himself a whiskey and drank to the memory of Bill Browning while the memory was still warm.

By morning, Pat Holloway found himself running a one-man operation with the obligation to buy thirty thousand dollars worth of leases for a bunch of Browning kids so they could beat the government out of an estate tax. He would have rather been working with Bill. He knew Bill. Bill Browning had never been afraid to fight the good fight.

Down in Houston, the officials at Exxon were holding a series of closed door meetings with their attorneys. They had been wronged, they said. Some little upstart oil exploration company in Dallas had stolen their name, and Exxon claimed that their name was worth millions of dollars to them. Their name stood for strength and quality and integrity, and they wanted it back. The trade name of Humble Oil & Refining Company had been on the books since 1917, and it had a revered place of honor in the annals of Texas oil history. Forget the fact that the oil giant had spent more than twelve million dollars in advertising and promotion to announce worldwide that it had changed its name to Exxon. It no longer wanted to employ the name of Humble, but Exxon would fight like a wounded tiger to keep anyone else from using it.

In spite of throwing twelve million dollars at television, in print, and on radio, much of the country still regarded the company purely and simply as Humble. People had grown up with the name and had probably filled the tank on their first cars with Humble gas. They gathered around their radios and went to the games with Humble, listening as the legendary Kern Tips broadcast the top Southwest Conference football clash on those brisk Saturday afternoons in autumn. At least, that’s what Exxon officials claimed, and they weren’t about to let some two-bit lawyer named Pat Holloway, who owned a two-bit oil company, steal their precious and glorious name. In a stern letter, Exxon demanded that Holloway give back the name.

In a letter just as stern, Pat Holloway said, more or less, to hell with Exxon. As far as he was concerned, Exxon had, by its own volition, abandoned the name of Humble. If company officials didn’t believe him, all they had to do was drive around the country and check the name on company service stations. Exxon. That’s what the signs said. Not a damned one of them said Humble. The only place any of the officials could find Humble was on his business card: Humble Exploration Company.

Exxon, trying to avoid a public skirmish, made an effort to settle the problem the only way it knew how. Exxon offered Pat Holloway a million dollars if he would agree to drop his use of the name and merely go away. He was a small fish. Exxon owned a big pond. Company officials decided it was worth a million dollars just to rid themselves of a nuisance. One well could produce a million dollars worth of oil by sundown.

Pat Holloway refused to negotiate. First, he told them, “I don’t need a million dollars.” Secondly, he said, “It would be a lot of trouble for me to go around and change the name of Humble Exploration on all of the wells and lease signs I have.”

“We’ll still give you the million dollars, Exxon said, and we’ll pay for all of the expenses you incur changing the name you’ve placed on your wells and on those legal documents associated with your leases.”

Pat Holloway smiled. “No deal,” he said.

“Humble is not your name,” Exxon said.

“It is now,” Holloway said.

He knew he was bound for court. Had known it all along. Exxon would not stand for someone telling the company no and hell no. Exxon did not like it a damn bit. Exxon had a fight on its hands.

Exxon fired the first volley with a threatening letter, no doubt written by some lawyer who didn’t believe that anyone had enough money to go to battle with a giant. He did not know Pat Holloway. Within legal circles and behind the closed doors of a judge’s chambers, his rambling answer became recognized as a classic. It was pure Pat Holloway. He calmly explained why he and Bill Browning had originally chosen the name of Humble Exploration for their oil company:

When Bill and I decided to go into the oil business, one evening over drinks after temporarily exhausting the subject of women, we agreed that while our many virtues and various attributes were undoubtedly sufficient to assure our success in the oil exploration business, both of us could, in all honesty, be somewhat deficient in humility, and we decided that while this might be no handicap in the pursuit of women, it could conceivably prove to be a detriment in the pursuit of hydrocarbons, particularly since neither of us had any prior experience in that field. We decided that it would be advisable not only to adopt an attitude of humility but also, as an added safeguard, to remind ourselves daily of the desirability of that particular attribute by reference thereto in our corporate name.

Pat Holloway’s letter also addressed Exxon’s grave concerns that the similarity between the names of Humble Exploration and Humble Oil & Refining might result in great public confusion. He wrote:

We were, of course, aware of the former existence of Humble Oil & Refining Company and that it had changed its name to Exxon. To avoid any possible confusion on anyone’s part between our company and the former public identity of Humble Oil & Refining Company (which your company had then recently spent untold millions of dollars changing over to “Exxon”), we did not include in our corporate name any reference to ”Oil” or “Refining” or “Gas” or “Petroleum” or “Hydrocarbons” or “Energy” or any other such word as might conceivably lead to confusion between the two organizations.

The principal reason we chose “Exploration” was because it aptly described our principal proposed (and to date actual) activity. A subsidiary or affiliated reason was that it was most likely to eliminate any possible confusion between us and the former name of your domestic affiliate since (1) the word “Exploration” has never (so far as I know) been included in the name of any of your vast menagerie of subsidiaries or affiliates, and (2) your company, in the years immediately preceding 1974, had not exactly been noted for its exploratory activities in the contiguous United States (where we intend to operate exclusively) except for your domestic exploration efforts offshore.

Pat Holloway fully explained that Humble Exploration was a very privately owned company, with only three shareholders, and no salaried employees. Zero. It does not sell any products or services or deal with the general public in any way. It does not do business with any trade or industry suppliers who could confuse us with you.

However, Holloway was forced to admit, without any hesitation, that one troubling instance of confusion did apparently exist. He wrote:

I must confess that I did receive a call last fall from an irate lady demanding to know (1) what the heck I had done with Kern Tips, (2) did I or did I not intend to broadcast the Southwestern Conference football games on the radio this season and (3) if not, why the heck not. I tried to refer her to Exxon, but she would have none of it. She insisted that she had never heard of Exxon, and after a while I believed her. I tried patiently to explain to her about the change of your name, but she accused me of trying to put some big con on her. As I recall, her exact words were, “I think you are spoofing me, young man.” Considering this remark judiciously, in its entirety, and being 45 years old, I decided to accept it as a compliment to my youthful albeit non-existent guild rather than as an insult to my integrity. I had the definite impression that if I could have given her any kind of encouragement whatever about a possible forthcoming resumption of football broadcasts, she would have turned her radio up full blast, continued her reminiscences about Sammy Baugh, Davey O’Brien, Ki Aldrich et al., and happily motored forever.

However, Pat Holloway made it perfectly clear to all parties involved that he had no intention of changing the name of his company, pointing out that “the public has gone from Humble Oil & Refining Company to Exxon, not come to Humble Exploration.” As he said so eloquently, ‘We have grown accustomed to our name and somewhat more strongly, we doubt we would be willing to make an even swap of names with you even if you were to make such an offer. We simply have always preferred Humble to Exxon.” He did write:

I trust you are not offended by our preference to our name over yours. Just because we think you made a mistake in changing your name does not necessarily make it so. And even if it was a mistake we think you are now big enough to survive even more than one little mistake like this. Overall, we admire you greatly. In fact, we believe you guys have reached the point where you are probably going to make it in a big way. In all respects other than changing our name, we remain your humble and obedient friend.

If any of the foregoing arouses your ire or offends your dignity to the extent that you decide to revoke my Exxon credit card, please at least reissue to me in lieu thereof my old Humble credit card so that I can purchase on credit some of the products and services that you presumably still market under the (Humble) trademark registrations.

Pat Holloway knew that the company’s Board of Directors had passed a 1972 resolution calling for the continued use of HUMBLE after the changeover to EXXON. To do so, Exxon instituted a trademark maintenance program for the trademark by delivering packaged Exxon products to pre-arranged customers with the Humble name. It also formed three corporation – Humble, Inc., Humble Gas Transmission Company, and Humble Oil & Refining Corporation – to sell bulk Exxon gasoline and diesel fuel to selected customers with the name HUMBLE printed on the invoice. It was, Holloway reasoned, all a scam and nothing else. Total sales from those so-called package products hit $9.28 in 1973, zero dollars in 1974, $140.12 in 1975, and $42.05 in 1973. The three corporations, in spite of their powerful and holier-than-thou Humble name, only had sales totaling $395,814.during the seven-year period from 1973 through 1979, not much for a corporate giant with worldwide business to worldwide customers.

Pat Holloway knew the inevitable was coming, and Exxon did not disappoint him. Exxon headed to court as quickly as the company could find a judge to hear the lawsuit.

In his deposition, Holloway, his face the portrait of diffidence in a gray flannel suit, was the iconoclast. He had more fun than any other attorney in the room. Amidst a crowd of grim-faced corporate suits, he told Exxon:

Your letter of January 11, 1977 addressed to William W. Browning, as President of Humble Exploration Company, Inc., has come to me because my friend Bill died last September, and, while we have spent considerable time since then worrying about where he went, at least one fact is certain. He left no forwarding address with the U.S. Post Office.

Under pressing examination, Holloway admitted that Exxon’s old name and his new name did provide some bewilderment. He said:

A couple of years ago, your people here in Dallas through postal error received one of our run checks, but they were kind enough to send it on to us after meticulously and exhaustively satisfying themselves that it represented production from a lease in which neither you nor any of your predecessors, subsidiaries, affiliates, etc., ever had any interest. The Exxon man apologized for opening our mail by mistake, explaining rather wistfully I thought, ‘You know, we used to be a Humble Company.’

Holloway sought to cement the idea that Humble Exploration was too small and insignificant for Exxon to even worry about. He said:

Where we have not ventured, not being big enough to swim, although we have waded around a little in South Louisiana and in a Texas bay – and nearly drowned financially in just a few feet of calm water when we struck our dobber in the dirt, differentially, three times and had to sidetrack each time – may you never have a daily drilling report beginning “STTD-2 14, 453.

Pat Holloway even told the nervous panel of lawyers, with a degree of humility that only he could summon up at times like these, that his grandmother might well be the reason behind Exxon’s success, pointing out:

When my grandmother was running Gulf’s (and prior thereto Guffey’s) operations in Texas from Beaumont during and after Spindletop, she hired some kid geologist who went on to find a bunch of oil for your predecessor and ended up as President of Humble Oil & Refining Company. The Lord only knows where you would be now if Grandmother hadn’t hired that kid, trained him, and then advised him to switch companies because Ben Bolt and some other older geologists she had could work up all the prospects she had budget enough to drill. But maybe, just maybe, you would have ended up like Mobil, forced into selling ladies’ ready-to-wear, or like Gulf, bereft of meaningful reserves or control of crude both in the Permian Basin and in the Middle East, and, to boot, probably faced with increased premium costs on their directors’ and officers’ liability insurance policy.

Pat Holloway was through. He leaned back, propped his feet up, folded his arms, and grinned defiantly. Exxon officials and attorneys had no idea what they were going to do with him. They only knew they would see Holloway in court. He was not concerned. Exxon’s attorneys began to sharpen their verbal swords. Pat Holloway’s was already honed to a razor’s edge. The battle, however, would come another day.

Holloway knew and understood the court system. He might or might not lose the name of Humble Exploration Company, but it would be a long time before anyone knew for certain. Once the lawsuit entered the mold-scented bowels of the courthouse, then tried to shuffle its way blindly through the maze of an appellate court, any permanent decision or ruling didn’t have a chance of surfacing or seeing the light of day for years.

In the meantime, Humble Exploration Company, in all of its glory, with Exxon officials and attorneys seething in Houston, was on the way to gamble in a play that was far too small for Exxon. Besides, an independent operator could drill a well for upwards of two hundred thousand dollars. The same well would cost Exxon a million and a half dollars. Too much fat. Too much overhead. Too much fine print and red tape.

At the moment, Pat Holloway had never heard of the Austin Chalk, and Giddings was nothing more than a dot on the map that, until now, his travels had always managed to avoid.