Bryan Burrough (15 page)

The day East Texas oil first spewed into the skies, all the major oil companies were in the process of drastically scaling back their exploration budgets. Shell, saddled with heavy debt after a late-1920s expansion, had all but stopped acquiring Texas leases and rarely drilled the ones it had; in 1931 alone, it let lapse leases for which it had paid eight million dollars. Gulf was in even worse shape. Beset with financial losses, unable to secure bank loans, it simply lacked the money to buy new acreage. Many of Gulf’s leases lapsed as well. The Texas Company, meanwhile, had refocused its operations, deemphasizing exploration in favor of refining and marketing. Only the sharp executives at Houston-based Humble, while slashing their exploration budget, remained actively in the market for new reserves. Its men, led by the geologist Wallace Pratt, instituted a new policy that emphasized the acquisition of proven oil fields, that is, fields found by others.

It was Humble’s new policy, in turn, that laid the foundations of the three greatest oil fortunes in Houston. The first recipients of Humble’s largesse were Roy Cullen and his obstreperous partner, Big Jim West. By 1931 West had been pestering Cullen to sell their newfound properties for almost two years. At least sell one field, he pleaded—Rabbs Ridge in Fort Bend County. To West, it was “just another field.” Cullen wouldn’t hear of selling. Without telling Cullen, West sounded out Gulf Oil’s Pittsburgh headquarters, but found no interest. In March 1932 he telephoned Wallace Pratt at Humble in Houston, who had been following their progess. The previous November one of Pratt’s geologists, estimating that the field might contain 127 million barrels, had recommended buying it “on anything like reasonable terms.” Pratt proposed a deal in which Cullen and West would receive $3 million in cash and an additional $17 million to be paid from future production; in today’s dollars, the offer was roughly $250 million.

Cullen scoffed. “The stuff in that field is worth a hundred million dollars,” he told West. “Maybe two hundred million.”

West gave no ground. They had suffered two blowouts, West argued; the field was unstable. The argument stretched on for days, becoming bitter. Finally Cullen gave in, if only to find a way to dissolve the partnership. “After this deal is closed, we’re through as partners,” Cullen said. “I’m not going to find any more oil fields for you to give away.” The Humble deal was struck in March 1932, and Cullen was right about the field’s potential; by the late 1940s Humble would pump more than one hundred million barrels of oil from the field. A Humble corporate history regards the purchase as a great bargain.
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The Humble deal made Cullen and West two of Houston’s richest men. Cullen wouldn’t have to work another day in his life, but he was only fifty-one and retained the itch to find more oil. Striking out on his own, he hired a onetime neighbor, an attorney named Harry Holmes, to be his No. 2 man. They called their new company Quintana Petroleum, after a Gulf Coast ghost town Cullen spied on a fishing trip. Cullen brought in his daughter Agnes’s new husband, Isaac Arnold, to be chief engineer, and his son, Roy Gustave, who was now married, as well.

By the mid-1930s the last great untested lands in Texas lay beneath the state’s largest ranches, and during the Depression Humble competed with a series of wildcatters to lease them. Humble secured the biggest prize of all in 1933, the rights to drill beneath the million-acre King Ranch, a vast coastal prairie of more than thirteen hundred square miles stretching from Corpus Christi nearly all the way to the Mexican border; it was the largest oil lease in American history. Roy Cullen, meanwhile, set his sights on the King Ranch’s neighbor to the north, the fabled Tom O’Connor Ranch, a five-hundred-thousand-acre spread outside the town of Victoria. The O’Connors had been running cattle since before the Texas Revolution, and their feisty paterfamilias, Tom O’Connor himself, had made clear to any number of oilmenhe wanted nothing to do with the kind of chaos and controversy he saw playing out in East Texas.

Cullen wangled a meeting with O’Connor by calling him directly. The crusty old rancher said he’d get back to him, then didn’t. After several weeks, Cullen sent in a mutual friend, Chad Nelms, who persuaded O’Connor to make the deal. O’Connor warily instructed his lawyer to draw up a set of contracts. “You tell this feller, Cullen,” O’Connor warned, “that if they change one damn word, or dot an ‘I’ or cross a ‘t,’ they can tear up the paper.” Cullen signed the contract exactly as written. In it, he agreed to pay one dollar an acre to survey the ranch, plus the right to select two seventy-five-hundred-acre plots to drill. To reduce his risk, Cullen sold a half-interest to Humble for fifty thousand dollars.

The first hole they drilled, the “O’Connor A-1,” hit salt water at 4,450 feet. Cullen dispatched his son Roy to rework the hole in preparation for—his mantra again—drilling deeper. A few weeks later, O’Connor was standing by when the rig reached oil sands. Cullen dipped his finger into a sample core, smiled, and turned to the old rancher. “There’s a mile-deep pool of oil down there,” he said. “This will be one of the biggest oil fields ever discovered.”

It was an overstatement, but not by much. The O’Connor Field would produce more than seven hundred million barrels over the years, making it the tenth-largest field discovered in Texas. Though other companies were eventually allowed onto the ranch to drill, Cullen and Humble sank hundreds of wells in coming decades, much of the oil sold to the federal government and refined as jet fuel. Thanks to the O’Connor Field and his deal with Humble, by 1936, although practically no one knew it, Roy Cullen was the richest man in Houston.

Roy Cullen had been lucky enough to make money during the 1920s that allowed him to drill during the Depression. For those who hadn’t, and there were hundreds of penniless oilmen in Texas during the early 1930s, the only way to drill an oil well was by “poor boying,” that is, scraping, borrowing, begging, and even stealing equipment, then paying drill crews with promises, IOUs and groceries. In West Texas roustabouts who worked for poor boys like Sid Richardson called the work “bean jobs,” because they were literally paid with beans.

The third of Houston’s great oil fortunes fell to one of the unlikeliest of poor boys, a thirty-six-year-old named George W. Strake. Orphaned at the age of eight and raised by his sisters in St. Louis, Strake was a wiry little man who wore glasses, a quiet, deeply religious Catholic who, seeking romance and excitement after college, had taken a job in the Mexican oil fields in the early 1920s. Striking out on his own, trading leases and arranging the odd well himself, he had managed to amass nearly $250,000 by 1924. Hoping to start an integrated company that not only found oil but refined and sold it as gasoline, he took his new wife and resettled in Havana, where he set his sights on becoming Cuba’s biggest oilman. In the meantime, to keep money coming in, he started a Hupmobile car dealership. But Cuban sugar prices collapsed shortly after his arrival, plunging the country into depression. Strake found no oil, sold no cars, and within two years was running out of money.

In 1927 he washed up at his in-laws’ home in Houston, all but broke. He knew no one in Texas, nor the first thing about the state’s geology. But he had a car, and for two long years, while he scraped by buying and selling a few oil leases around Houston, he drove the backroads of East Texas and Louisiana looking for signs of an oil-bearing clay known in the Mexican fields as Lagarto-Reynosa. He would stop his car and walk through the woods, swinging a geologist’s pick, looking for Lagarto rocks. Finally, one afternoon in 1929, he was wandering down a creek bed outside Conroe, a village thirty miles north of Houston, when he noticed a crack in the bank where a flood had washed away the soil. He chipped off several bits of exposed rock and rolled them between his fingers. They were Lagarto. He was sure of it.

No one had found oil anywhere near Conroe, although traces had been found in a well drilled years earlier on the far side of town, which had led several majors to send in geophysical crews. Back in Houston, Strake tracked down their maps and studied them. He grew convinced there was a major field at Conroe. He took the last of his savings and leased every available plot of land southeast of town, nearly eighty-five hundred acres. He had no money left to drill himself, but if he could interest one of the majors, they might do it for him, splitting the proceeds. Humble, however, turned him down. So did Gulf. And six other large companies. “You’re out of your mind,” one scout told him. “There’s no oil over there. You’re on the wrong side of Conroe.”

Just one well, Strake begged. Just one well, and you’ll see. But after the stock market crashed that fall, no one wanted to hear it. All through 1930 Strake prowled the bars and hotels of downtown Houston, buttonholing every scout and geologist he could find, arguing for Conroe; once the scramble began in East Texas, people thought Strake was daft to be looking anyplace else. He offered to “checkerboard,” that is, give up alternate tracts of his land, to any driller who would poke a single hole in his ground. He found no takers. By the spring of 1931, with his leases scheduled to expire on August 31, Strake realized he would have to drill the land himself or lose it. There were only three problems. He had no rig, no money to get one, and, despite ten years in the oil business, only the vaguest idea how to drill a well.

Still, he would try; he had no other choice. His wife was a bank clerk, and Strake tried to raise money from her co-workers in exchange for land; no one was interested. There were breadlines in Houston that year; banks were closing; no one had an extra nickel to spend on food, much less on an oil well. A loner, far more comfortable in a church pew than a bar stool, Strake had joined an Elks Club to make friends; none of the Elks wanted in either. Strake went ahead anyway, finally renting a rig big enough to reach the target depth of six thousand feet; the owner handed it over in return for a piece of the action. Unfortunately, the rig was at a field one hundred miles away. Strake was obliged to truck it in; the hauler, too, took a piece of the action.

Once he had the rig, though, Strake had to find people to run it. Unfortunately, he didn’t know anyone who had worked in a Texas oil field, much less drilled an actual well. The only person he knew in Conroe was a timber-cutter who worked on one of his leases. The man gave him the name of a tool-pusher in Humble. The tool-pusher agreed to work the job, and bring along some friends to round out the crew. Now he needed a driller. Unfortunately, in August 1931 just about every driller in Texas was busy in East Texas. The tool-pusher gave Strake a name, Harvey Lee, an old driller now down on his luck. He was supposed to be up in East Texas somewhere.

Strake set out for the piney woods. At each town he stopped and asked for Lee. Nothing. In town after town, no Harvey Lee. He had been at it a solid week when, heading home after another sweltering day, he coasted up to a road crew. A man said he knew Lee. In fact, he lived in a hilltop shack just above the road. Strake trekked up the hill, found Lee and his young wife nursing a newborn, and left with a driller.

Everyone convened in a clearing deep in the pines three miles southeast of Conroe on August 13, just eighteen days before the leases’ expiration. It took two days to get the rig into place; Strake hired his lumberjack pal to begin felling trees to feed the boilers. They would need water to cool them, but after two weeks of work a water-well driller had been unable to find water beneath the land. On the final day, August 31, with no water in sight, Harvey Lee told Strake they would need to break ground by hand. With Lee showing them what to do, Strake and seven of his men took three chain tongs and, as the sun began to set, physically pulled the drill around and around until it bit into the dirt. They had made the deadline.

When water was finally found, the drilling began in earnest. Townspeople came out from Conroe to watch and shake their heads. To a man, everyone thought Strake had lost his mind. Every day was a battle. The boilers threw off showers of flaming bark, and the men spent half their time scrambling off the derrick to shovel dirt on fires that erupted in the dry pine needles, sometimes three and four of them a day. A forest ranger appeared one morning and ordered them to shut down until Strake installed wire screens atop the boilers to catch the burning bark. It worked fine until the screens filled with debris, at which point the boilers shut down and the drill bit sagged to a stop.

“Mr. Strake, I can fix those boilers for you,” one of his men offered.

“You can? ”

“Yes, sir, if you’ll turn your back a minute.”

The man picked up a shotgun, aimed at the screens, and, with three rapid shots, shot them all off. “Nice shooting,” Strake said.

When they reached 4,125 feet on October 13, they took a core sample. It showed a slight sheen of oil. Strake divided the core into three sections, threw each in a bag, and dropped them at the Houston offices of Humble, Gulf, and the Texas Company. If the core was valid, all three realized, Strake had the makings of a good well. But a number of oil scouts who knew the Conroe area felt it was a trick, that Strake must have “salted” the sample with outside oil to get them interested. As the drilling continued, more scouts began dropping by the site, eager to see whether “Strake’s folly” was real.

In the ensuing two months Strake fought every kind of mechanical problem, from broken drill bits to temperamental boilers. Finally, on December 5, 1931, the well struck oil—sort of. It was what oilmen called a “gasser,” that is, a small show of oil accompanied by an immense rush of hissing natural gas. Most of the scouts immediately dismissed it as a freak; the sand Strake had struck, the Cockrell, wasn’t known as an oil producer. Hundreds of lease traders and oil field workers came down from East Texas, but almost all returned within weeks. Intent on proving the doubters wrong, Strake began preparations for a second well, two thousand feet from the first.