Three Generations of Texas Wind Men Below the Surface
Since 1996, a legal battle has raged between ExxonMobil and a powerful South Texas ranching clan that believes the oil company sabotaged wells on the family property. Even after a ruling by the state Supreme Court earlier this year, the bitter feud shows no signs of letting up. Maybe that’s because it’s about something far more important than money.
One of the wells that the O’Connors claim was sabotaged by Exxon.
Photograph by Van Ditthavong
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As he walked through the front door of 2J’s, the modest little cafe down the road from his family ranch outside Refugio, Thomas Michael O’Connor had a feeling that something was wrong. It was a bright winter day in January 1995, and T. Michael, as he is known to all, had come in for a lunch meeting with Glenn Lynch, the operator of a legendary oil and gas lease on the O’Connor Ranch named for T. Michael’s great-aunt, Mary Ellen O’Connor. The ranch is one of the state’s largest, covering parts of Goliad, Victoria, and Refugio counties, and T. Michael ran its operations. At forty, he was a multimillionaire, heir to a family fortune in cattle, oil, and land that stretched over five generations, but he often ate lunch at 2J’s. The dusky interior was a relief from the bleached South Texas light, and he liked that he knew just about everybody coming in and going out.
Lynch was sitting at a long table with T. Michael’s cousins Laurie Miesch and Morgan O’Connor, who, along with ten other O’Connor cousins, were royalty owners on the lease. The meeting had been called by Lynch, and as T. Michael eased up to the table, his fears were confirmed by the look of worry on his operator’s face. Lynch was tall and strong-jawed, with a shock of white hair. Like most of the men at 2J’s that day, including T. Michael, he wore cowboy boots that weren’t just for show, favored the outdoors more than the indoors, and knew to say “yes, ma’am” and “no, sir” when the occasion required. Today he just looked grim. T. Michael glanced at Morgan. Her blue eyes—the same brilliant O’Connor blue as many of his relatives’—were stony, and the color had faded from her cheeks. Laurie was mad as hell. “Those SOBs screwed up our wells,” she hissed.
He didn’t have to ask who those SOBs were. Two years back, when the family had leased the wells to Lynch and his partners, he’d hoped it would mark the end of a long struggle with one of the most powerful companies in the world, ExxonMobil. For decades Exxon had operated the Mary Ellen O’Connor lease, but starting in the late eighties, it had informed the family that it intended to plug and abandon their wells. Those were rough years in the oil patch. Reserves were dwindling, old wells were playing out, and crude oil prices had dropped from about $30 a barrel to about $17. The wells needed expensive repairs, Exxon explained, and there was just no way to run the lease efficiently. The company faced the prospect that the lease might soon be operating at a loss, which was something it could not abide. Discussions about plugging the wells had followed, leading to arguments and many, many lawyers. Finally, in 1991, Exxon plugged and abandoned the field.
Not long after, however, the price of oil began to creep back up, and the Legislature promised tax breaks to operators who reopened old wells. Every landowner in the oil patch, and every independent oilman, rushed to get into the play. They knew that major companies like Exxon always left oil in the ground when they abandoned a field. At some point it cost a giant enterprise more to extract the last pools of oil than to ignore them, but an independent operator with a smaller overhead could make a nice profit with those leftovers. So when Glenn Lynch appeared in 1993 and told the O’Connors that he wanted to reenter the Mary Ellen O’Connor field, it looked like a win-win deal for everyone.
Except it hadn’t turned out that way. As droplets of water ran down the sweating glasses of iced tea, Lynch told T. Michael his story. He didn’t like delivering bad news, but here it was: He was having far more trouble than he could have ever imagined getting back into Exxon’s old wells. Sure, you expected some difficulties, but he’d had problems on almost every one of them. The experts he’d hired had never seen anything like it: The wells were full of junk—pipes, wrenches, tubing, even an upside-down drill bit—and the way they had been plugged made it difficult, expensive, and perhaps impossible for anyone else to get back in. Lynch was way over budget and losing a lot of money fast.
Worse, he believed the wells had been intentionally damaged and that the perpetrator had lied to the Texas Railroad Commission about their condition on the official forms that Lynch had relied on as a template for reentry. Lynch had thought about it long and hard, he told the O’Connors, and he’d come to a decision about who had sabotaged these wells: It had to be his predecessor on the lease.
“Are you sure?” T. Michael asked Lynch. He was thinking, There is no way Exxon did this. They’re just not that kind of people. But Lynch was upset, the corners of his mouth tight. It was crystal clear to him that someone wanted to make sure that those wells were never reentered. His company, Emerald Oil and Gas, intended to sue, and, he said slowly, he hoped the O’Connors would join in.
By this time T. Michael’s appetite was long gone. He pulled his cell phone from his pocket, flipped it open, and called one of his cowboys. “I’ll be delayed,” he said. He knew as well as Lynch that all kinds of crazy things could go wrong when you reentered a well. He also knew he couldn’t in good conscience force his operator to keep going and possibly lose his shirt. But suing Exxon? That could be a very dangerous game. Exxon rarely lost lawsuits. It could outlast and outspend just about anyone, even a family with resources like the O’Connors. He told Lynch he’d need to think it over.
It didn’t take him long. T. Michael had been told from the day he was born that he was just a steward—his family’s word—of the vast acreage he now controlled; it was his to hold and preserve for his children, and their children, and all the other O’Connors to come. He knew and loved every inch of this land, from the ruins of the small port near Copano Bay to the treeless coastal prairies to the tangled brush near Mission Creek. And now someone had despoiled it and the future he had been entrusted to preserve.
The lawsuit, which went by the awkward title Laurie, Jack, Michael and Molly Miesch et al. and Emerald Oil & Gas LC v. Exxon Corporation and Exxon Texas Inc. as successor to Humble Oil and Refining Company, was filed in 1996, a year after the meeting at 2J’s. It has raged, in one form or another, ever since, costing tens of millions of dollars, involving at least a dozen attorneys, and engaging, so far, one trial court (three years of discovery, three weeks of testimony), the Corpus Christi Court of Appeals (five years before an opinion), and the Supreme Court of Texas (which sat on the case for two years before ruling earlier this year). There have been accusations that the O’Connor family is locked in the past and simply cannot accept the reality that, after forty years, the field that paid them more than $43 million in royalties is played out. There have been accusations that Exxon, in refusing to admit to obvious wrongdoing, has used its enormous wealth to fight long past all reason.
The case continues to cause what William Joseph, a lawyer for the plaintiffs, has accurately labeled “a shit storm,” pulling into its vortex Texas land commissioner Jerry Patterson, state comptroller Susan Combs, and the Texas Railroad Commission. Indirectly, it affects all of us, since drillers who “waste” oil by leaving it underground, as the O’Connors claim Exxon did, also leave taxable revenue behind, which has an impact on state coffers. Patterson, who has been particularly antagonistic toward Exxon in this case, has further argued that if operators can get away with lying to the Railroad Commission about the condition of plugged wells, as the O’Connors also claim Exxon did, drillers won’t be able to trust the documents and then won’t invest in reentering old wells. Again, this means a drop in tax revenues, hurting, among other things, the Permanent School Fund and the Permanent University Fund.
Not surprisingly, Exxon denies any wrongdoing and vows to fight on to clear its name. “If ExxonMobil thinks that some person or entity for whom it has responsibility has done something wrong, it will make a reasonable settlement,” explained Shannon Ratliff, Exxon’s appellate attorney. “If, after investigation, the determination is made that ExxonMobil has not done anything wrong, it will vigorously defend its position.”
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