New Oil: The Giddings Gamble
The Austin chalk is the most perverse, contrary, incorrigible oil field known to man. The big oil companies tried it and gave up. But one man learned the way to make the chalk yield its secrets—and its oil.
James says: Who is that on the cover of the February 1981 publication ? I think his name is David Perkins, anfriend of my brothers from younger years. IF that’s him where is he now ? (October 21st, 2009 at 4:22pm)
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Holloway then came to blows with a much larger foe. In the summer of 1977 Exxon filed a $1 million suit against Humble for alleged trademark violation, claiming it still operated three companies that used the name Humble. Holloway responded by gibing in a letter to Exxon, “We have grown accustomed to our name, and respectfully decline to change it at your request. Stated 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.”
By November 1977 Holloway was finally ready to drill his first well. It was called the Burttschell No. 1 after local leaseholder Elder Burttschell, and it was located about ten miles north of Giddings on the farm-out acreage acquired from Mosbacher. Since the site was so far out of town, it was regarded as a “stepout” well, a wildcat attempt to extend the boundaries of the Austin chalk play.
Just before Christmas the Burttschell came in like an old-fashioned gusher. A thick stream of honey-colored oil shot right up over the top of the crown block 120 feet off the derrick floor. The entire crew and much of the surrounding countryside were bathed in oil. But there was no delirious dancing in the rain of liquid money. The Burttschell was a full-fledged blowout, an oil well gone amok. Besides wasting precious oil, it could catch fire. The crew had to get the well under control. Unfortunately, this was the first well Humble Exploration had ever operated, and no one really knew what to do. They had struck oil, but they had also awakened a monster.
Day after day Holloway and his crew struggled to bring the Burttschell under control. It was cold and rainy, and the men huddled anxiously in Schubert’s restaurant, trying to figure out their next step. Finally, in early 1978, after ten days of the well’s rampage, they managed to stop the blowout by dropping “pills” —— super-heavy drilling mud mixtures —— down the hole.
After it was controlled, the Burttschell No. 1 was tested to have potential oil production of 1084 barrels a day and potential gas production of nearly half a million cubic feet a day. What was more, it showed that the Austin chalk play was not confined to the city of Giddings but had all the earmarks of a sizable oil field.
Thirty Miles of Play
Under ordinary circumstances, a well like the Burttschell No. 1 would have touched off an oil rush as dramatic as the blowout it had come in with. But the Burttschell was, after all, an Austin chalk well. Despite its impressive potential and the success of the Windsor and U.S. Resources wells, many oilmen in Houston and Dallas remained cautious. They expected the Burttschell to dry up. Besides, as the Houston and Dallas oil fraternity understood it, much of the land in Lee County had already been leased. There was very little room to get in on the play even if they wanted to. Or so many of them believed.
Humble, Windsor, and U.S. did not remain the only operators in the field. In addition to the five other companies that had already drilled wells around Giddings, no less than sixteen newcomers joined the play, among them the Superior Oil Company and K. S. “Bud” Adams, Jr.’s, Ada Oil Company of Houston. But if these new entrants increased the competition and the drilling activity in the field, they hardly constituted a full-fledged oil rush. Humble, U.S., and Windsor still had plenty of room to operate.
After the Burttschell, Humble quickly drilled two more Lee County wells. The first, called the Perkins, made a relatively modest 150 barrels a day, then began to drop off. The second, the Kocureck No. 1, turned out to be another whopper. Initial potential was calculated to be 1003 barrels of oil a day. Located even farther north than the Burttschell, the Kocurek extended the Giddings field up to the Burleson County line.
Windsor, under Holifield’s direction, brought in seven producing wells in 1978. Five of them were definitely commercial, though a little disappointing. But two others came in with a potential of more than 1000 barrels of oil a day each. U.S. Resources did even better with a big strike on the three-thousand-acre Gerdes Ranch, between the Burttschell and the Kocurek, that proved to be a harbinger of many wells on the property.
In the summer of 1978 Humble began another stepout well. This time the drilling was to the south of Giddings rather than to the north. Located in Fayette County just above the town of La Grange, the well was called the Chicken Ranch No. 1 after the infamous local brothel that had just been closed down and was soon to be immortalized in a musical comedy. Although the well was not actually located on the old Chicken Ranch property, Pat Holloway liked the name and thought it might bring good luck. Instead, it seemed to bring just the opposite. When the Humble men reached total depth and ran a log, they got only railroad tracks —— no shows, no signs of faulting, nothing.
“Normally, you wouldn’t have set pipe if you’d looked at the log,” Holloway admitted later. “You would’ve plugged the well. If I had shown the log to my partners, they would’ve voted no.”
But Holloway put his trust in Ray Holifield. And Holifield told him there was a fault —— which suggested a fracture system containing oil —— just below the total depth to which the well had been drilled. Holifield wanted to set pipe on the well and frac it, as Windsor/U.S. had done with the Fariss and Molly C. Davis wells. That would involve still more financial risk, but Holloway decided to abide by his geologist’s counsel.
Humble’s hopes were fulfilled. In early September 1978 the Chicken Ranch No. 1 responded to its frac job by coming in at a potential rate of 1353 barrels per day. The well was, as Holloway said, “a real barnburner,” not to mention the most productive ranch property in the county since Miss Edna and her girls had been shut down. Even more important than its immediate success was the fact that the Chicken Ranch No. 1 marked a significant extension of the Giddings field. The distance from the Chicken Ranch No. 1 in Fayette County to the Kocurek No. 1 up by the Burleson County line was a good thirty miles.
Missing Maps and Unknown Heirs
While drilling their wildcats, Ray Holifield’s three independent clients also snatched up the three biggest and best acreage positions in the area. This they did by luck, cunning, and assistance from local insiders. Lee County was not all leased up by the time Humble brought in the Burttschell well —— it just looked that way. As Pat Holloway observed, the standard lease maps for the area were “all screwed up.” Large portions of the land around Dime Box were owned, or at least settled, by poor black families. Titles passed down through the generations were often unclear, and there were many missing heirs. To make matters worse, some of the maps that belonged in the Lee County Courthouse had disappeared, and many of those that remained were out of date.
The confusion over the Lee County maps apparently revolved in part around a family of local land experts named Knox. The late patriarch of the family, John Knox, Sr., had been the county surveyor as well as the owner of the Lee County Land and Abstract Company. According to Knox’s twin sons, John and Robert, two sets of Lee County maps were made in the early part of the century —— one set for the county and one set for the private abstract company that their father later bought. John Knox, Sr., kept his own maps in good order. The county’s maps, however, were not kept current. When John Knox, Sr., died, his son Louis Knox became county surveyor, while the Knox twins took over the family business and their father’s maps.
Prompted by complaints about the missing and out-of-date county maps, the Lee County Commissioners’ Court passed a resolution in October 1977 asking county surveyor Louis Knox to make sure that all maps, plats, and surveys belonging to the county were in fact in its possession. The commissioners also asked the Knoxes to provide all of their father’s working papers. Louis Knox replied in a letter that his father did not keep any working papers. In a separate letter from the Lee County Land and Abstract Company, John and Robert Knox also told the commissioners that their father did not keep working papers and suggested that the commissioners consult the county deed records if they wished to bring the county maps up to date. Still concerned about the confusion, county judge Carey Boethel brought the matter to the attention of Attorney General John Hill’s office. But the complaint lapsed without further official action.
Meanwhile, the Knox twins used the only privately owned Lee County maps —— the set reportedly made for the abstract company —— to cash in on the oil lease title work that accompanied the oil boom. They also got in on the action by acting as landmen and assembling oil lease blocks for operators interested in drilling wells in Lee County.
Falling back on his legal training, Holloway, for one, decided to do his title and abstract work himself. With Bennie Jaehne doing the legwork, Humble started acquiring more leases outside Giddings. The going rate was an up-front fee of $25 per acre and a one-eighth to one-sixth share of any future production; though low by comparison to those of some other oil plays, these prices were then top dollar for the Giddings field. Jaehne, for his part, got 0.5 per cent overrides on each of the leases he obtained for Humble. Thanks largely to him, Humble kept acquiring leases in 500-acre chunks. Eventually the company had more than 178,000 acres in Lee, Fayette, and Gonzales counties and surpassed both U.S. and Windsor to become the largest leaseholder in the field.
About this time Holloway applied for new field rules requiring 160-acre spacing, the very thing he had fought against only a year or so before. Now that he had acquired much more acreage, he did not want to deplete his reservoirs by drilling too many wells too close together. As he blithely admitted afterward, he went before the Railroad Commission and “proved conclusively” exactly what he had disproved conclusively before.
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