In 1917 Ranger became the first of the West Texas oil boom towns. Four years later it was dead. Now a huge oil company is gambling millions and its corporate future that the Ranger boom isn’t over after all.
From IH 20—the straightest, flattest, loneliest highway in Texas—Ranger looks like the original place that time forgot. You approach it through the raw, unvarnished landscape of the Cross Timbers. strewn with stunted oaks and scrawny bushes that cower under a hard blue sky like figures at the bottom of a child’s drawing. The soil, littered with shards of rock, isn’t good for much of anything except goats, a few cattle, and peanuts when the rains are good. Even the chamber of commerce sign (“Ranger, Home of Industry, Schools, Churches, Famines”) is cracking and peeling. But here, in this desolate terrain, are the ghosts of a lost Eden.
Ranger, a hundred miles west of Fort Worth, is the site of what was once the largest oil field In the world. In its heyday it was the consummate boom town, by far the wildest, most lawless, and most wasteful binge in the history of oil. No one knows exactly how much oil came out of the Ranger pool between 1917 and 1920—although the Allies couldn’t have finished World War I without it—and certainly no one knows how much oil was left in the ground. But it was undoubtedly the greatest discovery of its day, generating wealth on a gab ten times greater than the California gold rush. When Hollywood set out to make the definitive oil boom movie in 1940—Boom Town, starring Clark Gable and Spencer Tracy—Ranger was chosen as the setting, and Boyce House, erstwhile editor of the Ranger Times, was hired as one of the screenwriters.
But the glory of Ranger, like all great sagas, had a tragic ending. In 1920, a scant three years after it was discovered, the field faded and died, a victim of acute greed. Pressure in the reservoir fell to zero, and even though there was far more oil left in the ground than had been pumped out, there was no way to recover it without the pressure to push it to the surface. Banks failed, fortunes were lost, and the town began a slow decline that continues to this day. There’s not much left to recall Ranger’s golden age now. Main Street is three blocks long and frequented by the elderly. Many of the young have moved away to find jobs. A single oil derrick was erected for the benefit of tourists at the junction of U.S. 80 and the Texas & Pacific Railroad, but it blew down in the fifties and was never replaced.
Still, the dream has never really died; making the Ranger sands flow again is the kind of thing that otherwise cynical old wildcatters talk about, half seriously, long after the sun has set. Most of them have never even seen the field. Few have ever witnessed the art of cable-tool drilling, the primitive method used at some five thousand sites all over the Ranger field. Yet the very name holds the allure of riches. Ranger—now there was an oil field! If only someone could figure out how to restore pressure, the kind of pressure that sometimes spewed 10,000 barrels a day into the air. sending roustabouts scrambling for safety and forcing drillers to dig great earthen dams to hold the oil back until the wells were capped. If only someone could do that, then maybe, just maybe . . .
The Price Is Right . . . Almost
Many have tried. Since 1920 Ranger has been the common destination of hundreds of prospectors, dreamers, and fortune hunters. all looking for the magic formula that would give the field life again. Some poured nitroglycerin into the old wells and exploded the walls of the reservoir. Others tried waterflooding, pumping massive amounts of water into the ground to force oil up through the rock. Still others moved their rigs farther and farther from the original field, certain that they would hit a second bonanza any day. But none of them had enough money or time or patience or luck to make it work. The farmers in the area, tired of seeing their land scarred by machinery and scattered with oil field effluvia, eventually started locking their gates. The bum, it seemed, was finally, beyond a doubt. over.
And then the Ranger Project was born. It was in 1972, right before America’s first major peacetime oil crisis. Soon the U.S. government would be telling the public that we were finally running out of oil, just as it had in 1917. And this time we would have gas lines, caused by the temporary Arab embargo, to prove it. Suddenly the notion of opening up old fields—not exactly a new idea, since it had been done on a limited scale since the fifties, mostly in Oklahoma—seemed prudent, eNn urgent. The day would soon arrive when old oil, expensively recovered, would be both cheaper and politically safer than new oil purchased from the Arabs. It would call for a new breed of wildcatter, an oilman who combined the contradictory traits of the cool, analytical scientist and the brash, gambling driller. Enhanced recovery, the art of coaxing. dead oil out of depleted reservoirs, had been tested in the laboratory for more than twenty years, and yet the technology was still in its infancy. The acid test—hands-on experience in the oil fields—would require billions of high-risk dollars. For the moment, federal price controls made the use of such expensive methods all but impossible, but a handful of big oil companies were getting ready.
The Ranger Project began a hundred miles from Ranger, in the Dallas office of a man a named Luther Ellison. Ellison is a bluff, loquacious petroleum engineer who entered the oil business thirty years as a roustabout for Sun Oil, now the nation’s eleventh-largest oil company. Today he is vice president of reserves development for its subsidiary Sun Production Company and a man who believes firmly that the future of the oil industry depends on how much can be salvaged, as well as on how much can be discovered.
Surrounding Ellison on this day in 1972 was a select group of engineers and geologists whose names were largely unknown even within the oil industry. This is hardly surprising. since a certain anonymity is characteristic of everyone who works in the production, as opposed to the exploration, end of the business. The “clash-of-metal boys,” as Ellison calls the exploration types, tend to get all the attention. The job of a production engineer, on the other hand, is as elusive as that of a medieval alchemist. Whereas an exploration engineer either succeeds or fails—he finds oil or he doesn’t—the production engineer always fails. The only way to succeed would be to get more oil out of a reservoir than he was able to get out the year before—a virtual impossibility, but not beyond the realm of speculation. Put another way, his job is to get more and more out of less and less.
When Ellison and his colleagues met, they were looking for more dead oil to put their science to work on. The question was: where, The answer came from Martin Russo, the dean of Sun geology, Who was knowledgeable enough to be aware of the glories of the Cross Timbers region. “What about Ranger,” he said.
Ellison, an avid student of oil field history, was fascinated by the thought, but skeptical. “What do we know about Ranger?” he asked.
They all shrugged their shoulders.
But Ellison couldn’t get Ranger out of his mind. A few days later he called Russo into his office for more discussion. Russo then contacted Kenneth Larson, a twenty-year veteran geologist who had spent almost his entire Sun career working on the technical problems of recovering oil. Larson was assigned a forbidding task. Russo told him to search out every scrap of information available on the Ranger field, from driller’s logs to historical accounts of the boom, and to use his findings to answer a single question: is this project—a multimillion-dollar gamble—even worth thinking about?
Larson spent two full months putting together his report, but it took him only a few days to realize how enormous the odds were. There were just no reliable records on the Ranger field. Discovered and abandoned long before the Railroad Commission became actively involved in oil field regulation, drilled by hundreds of anonymous wildcatters with no knowledge of geology, the Ranger sands were still as mysterious as ever. Larson did manage to borrow about 500 old driller’s logs, which were useful but sketchy, and 35 modern logs from various projects in the sixties. Aside from that, he had two thousand scout cards (reports from oil field spies) and a field map map drawn in 1920 by the U.S. Geological Survey. Sun itself had participated in the original boom, but when Larson went looking for the old company records he was told they had been shredded in a 1190 housecleaning.
Larson’s report, then, relied a little on educated guesswork and a lot of instinct. He had seen other fields that looked like Ranger, at least from the surface, and he was able to conclude with some certainty that the pool was a continuous blanket of oil-bearing sand and not a series of isolated reservoirs. Even more promising was an engineers calculation that at least 80 per cent of the oil was still in the ground. (That estimate was later revised to around 86 per cent, meaning that using the new technology for oil recovery, Sun could presumably draw as much oil out of the ground as had been produced during the boom. Depending on which account of the boom you believe, that could be anywhere from 15 to 40 million barrels.) Larson drew up a map showing what he thought to be the extent of the field and turned it over to Ellison. And there, for four years. the matter lay.
After the gas lines of 1973 disappeared, so did the seeming urgency of secondary recovery projects. Buying OPEC oil, even after it doubled in price, was still more economical than producing price controlled oil from old American fields. But decontrol always seemed to loom over the horizon, and so Ellison, like his a counterparts at most major oil companies. bided his time. Meanwhile, he read every book he could find on the Ranger boom.
Books, poems, songs, sermons, magazine articles—all were available in abundance, for Ranger produced nearly as much popular literature as it did oil. Reports from the New York dailies were on the scene almost from the first week after the discovery well blew, and the next three years brought novelists, poets, fight promoters, theatrical directors, World War I aviators, evangelists, and all forms of high and low life, most of them there to get rich, but a few drawn simply by the grand decadence of it all. Almost overnight, Ranger became a genuine wild West town oddly displaced in the twentieth century. Dance halls and gambling dens flourished on a scale unseen since the 1890s, the last train robbery was pulled off a few miles out of town, citizens’ vigilante groups were formed to keep the peace, and scores were occasionally settled by duels in the streets. The town fathers even went so far as to hire a two-fisted marshal named Si Bradford who toted a shotgun called Old Betsy in one hand and a six-shooter in the other.
It all seemed unreal even then; today it seems almost unbelievable. Ranger has had only one full-time oil field worker. a man named Troyce Boone, for nearly ten years. Boone is a rough-hewn, burly man who lives north of town in a little frame house he built for his family on a rocky three-acre plot. Six days a week, he makes his rounds in an old pickup, looking after the dozen pumps that still eke out two, four, or, on a good day, even six barrels of oil at a time. Most of those wells have been reopened since 1973, the year Congress decontrolled so-called stripper wells, those that produce ten barrels or less a day. The oil comes slowly, but it brings over $40 a barrel when it does come. This is all that’s left of the field’s past glory.
Aside from Boone, it’s hard to find anyone in the town who even remembers how to find the Ranger discovery well, better known as McCleskey No. 1. To reach it, you drive west out of town on a farm-to-market road until you come at length to a huge caliche pit. There you pull onto a gravel road, then turn onto a dirt road, then drive right down into the pit itself, bumping across the clods of dirt that have been rutted by heavy machinery tracks, and finally stop alongside a murky pool of scum-covered water. After scaling a steep ravine and crashing through some thorny bushes, you follow a deer trail into a field overgrown with brush and scrub oak. Four hundred yards into the thicket., surrounded by a silence so total it seems you are nearing the absolute end of civilization. there appears in a clearing a large white marble tombstone bearing the inscription:
Site of First Oil Well Drilled In Eastland County
The J. H. McCleskey No. 1 discovery well of the Ranger pool was drilled by Warren Wagner under the supervision of W. K. Gordon of the Texas Pacific Coal and Oil Company July 2-October 27, 1917. Initial production was 1600 barrels with 3 million feet of gas. Abandoned May 30, 1930, after producing 275,000 barrels of oil.
“They put that up a few years back for tourists,” says Boone.
The tombstone is fitting, for the McCleskey, like every other producer in ranger, died in its infancy. It was here that William Gordon, superintendent of the Texas Pacific Coal Company (TP) at neighboring Thurber, came in 1917 at the behest of the merchants of Ranger to drill for oil. Times were bad. One of Eastland County’s worst drouths bad decimated the crops, and the U.S. had just entered World War I. So, as many others did in those days, the citizens of Ranger put together some 25,000 acres of leases and turned them over to Gordon for 25 cents an acre in exchange for his promise to drill on their land. The deal was not as speculative as it sounded. As early as 1915 small fields had been discovered at Strawn, ten miles to the northeast, and Moran, a town forty miles west where the oil pool was found so close to the surface that a farmer erected a sign reading “Men with Peg Legs, Keep Out.” Gordon’s deal would change Texas Pacific from a coal to an oil company, lead to the destruction of Thurber and the rise of Ranger, and eventually create the capital to make TP one of the largest independents in Texas.
The first well went in at the farm of Mrs. Nannie Walker, just north of town, and considering the time, it was a deep one. The well struck gas—which was considered worthless in 1917—and then the bit broke off at 3400 feet. The well was abandoned, the gas left flowing freely into the air. Next Gordon started the McCleskey well. At 3200 feet it was pronounced a dry hole by TP’s New York office, but Gordon disobeyed his orders to close and continued drilling. It finally blew in at 3431 feet and raged out of control for several days, spewing about 1700 barrels into the air each day. Gordon hardly had time to cap it before the hustlers started arriving.
Within a single month, $1 million had been paid for leases around the TP properties. Within nine months, four hundred wells had been drilled. From a sleepy little hamlet of a few hundred people with a single “hotel” (four rooms), Ranger quickly became the largest city between Fort Worth and El Paso. Its population of 30,000 people lived in shacks, tents, and even oil storage tanks. The unpaved streets became muddy quagmires, creating a flourishing trade in sled ferries to get people from one side of Main Street to the other. Farmer McCleskey opened the McCleskey Hotel. As the boom spread westward to Eastland and beyond, a man named Conrad Hilton bought his first hotel—the Mobley, in nearby Cisco. A chair in a rooming house parlor went for $5 a night (or $2.50 for daytime sleeping only).
It was a boom and by the big Eastern oil companies and small independents alike. But, of course, the titan of the field was Texas Pacific—now renamed Texas Pacific Coal and Oil—whose coffers grew so heavy that within a few years management decided to close down Thurber entirely—not just the coal mines but the whole town. And the remarkable thing about the Ranger boom was that the price of oil continued to increase, as it had not during Spindletop Titusville,, East Texas, and most other major booms. One reason was that the Allied war effort was starved for oil. Another was that the Model T was just corning into its own as the refining of gasoline was perfected. At the height of the boom in 1919, a barrel sold for $4.25—$1.07 more than it would bring in 1970—and the demand never subsided.
But the field did. After producing 60,000 to 70,000 barrels a day for much of its life, it played out in a matter of months. A few companies, including TP, stayed on in Ranger even after the bust. They exploded and acidized wells, installed pumpers, and tried a dozen other ways to wrench a few more drops out of the ground. But soon it was obvious that the money was elsewhere—in the Permian Basin, in East Texas—so even the few marginal wells were plugged. Independents appeared from time to time, buying a few leases, trying one new trick or another. The most ambitious was a petroleum engineer named H. L. Billhartz of Dallas. Billhartz’s theory was that a waterflood would bring the Ranger sands back to life, since the rock of the reservoir was so porous and permeable. It took him seven years in the early mid-sixties to get the necessary leases, and another two drill his 23 test wells. But when he started pumping water into the ground, he was recovering only one hundred barrels of liquid, mostly water, for every four thousand barrels of water he injected. The project may have been doomed anyway, since TP—still the biggest Ranger lease-holder—refused to join him.
The Lease of Sun’s Worries
By mid-I979 Iran’s revolutionary government had shut off its flow of oil exports, and the second major oil crisis of the seventies spread across the nation. Gas lines were back, and so was panic. Most oil industry executives had a lot more to do than worry about old, played-out fields as they wrestled with gasoline allocations, scrambled for oil in the spot market, and searched high and low for long-term supplies of crude. But there was comparative calm at Sun Production. Two years earlier Luther Ellison had resurrected his file on Ranger and summoned John Hawkes, an old friend and the area land manager for Sun’s extensive Midland district. When Hawkes got to Dallas, Ellison spread Kenneth Larson’s 1973 report out on his desk, told Hawk the Ranger field had been dead for sixty years, and asked him whether he could lease at least one third of it for Sun. “I had never even heard of Ranger,” said Hawkes. “I had to look on the map to see where it was. But I told Luther I’d try.”
From that day on, Hawkes was a special projects land manager, but his assignment was kept secret even within the company. The first thing he did was hire Robert B. Ross & Associates, a Midland consulting firm, to provide the front men for him at the Eastland County Courthouse. Nothing drives up lease prices faster than the knowledge—even the rumor—that a major oil company is buying them. Hawkes figured it would take several months of searching through musty old title records just to figure out who owned
mineral rights to the land. Almost every landowner in the county had sold his mineral rights sometime during the boom, and those rights had been resold again and again up until 1920, when, of course, they became no more valuable than Confederate currency. Since anyone holding a lease in 1920 was likely to be dead by 1979, it was necessary to discover not only the original owner but the heirs as well.
Even though Hawkes had been with Sun for 25 years and was considered the most experienced landman in the company, he called this “easily the most challenging assignment I have ever been asked to do.” A lean, laconic man with tentative manner, Hawkes has the landman’s classic traits: the patience to spend endless hours in courthouse records rooms; the endurance to drive hundreds of miles into rural America, searching for long-lost heirs; and the charm needed to get along equally well with a widow who has two acres of land and a tycoon who has ten thousand.
In early June, eight employees of Robert B. Ross left Midland with Hawkes, who was traveling incognito, a. Moved the Ranger Project headquarters to the Ramada Inn on IH 20 in Eastland. Hawkes’s first task was to find suitable office space. Allowing people to believe that he was a Robert B. Ross employee, he leased an old title abstract office overlooking the courthouse square in Eastland. The office itself was inconspicuous enough, perched on the Second floor above a leasing company, with a narrow entrance from the street. It was convenient, too—four doors down from the Eastland Telegram five doors from the Eastland County Abstract Company, and directly across the street from the courthouse.
The problem, as Hawkes soon learned, was that nothing is inconspicuous in a small town. He first suspected that something might be amiss when failed to find anyone in Eastland who would go to work as his secretary. He finally resorted to hiring a secretary from Abilene. Then, as the title search work got under way in earnest., he began to notice onlookers loitering around the courthouse records room, staring with open curiosity as the strangers squeezed in and out of the small space, going through every title book in the place. Hawkes was keeping to himself, for obvious reasons, but at the end of a twelve-hour day he would often settle in at the Ramada Inn restaurant and listen to the local gossip. One night he learned that his dark secret was out: he and all his strange friends had come to town to try to buy the bowling alley.
Hawkes was mildly amused, but being new to Eastland, he underestimated the speed and efficiency of a small town gossip mill. As the days turned into weeks and the weeks into months, the town came to know everything about Hawkes. He wasn’t really going to buy the bowling alley, it turned out; he was representing a major corporation that intended to move a thousand families to Eastland. To this end, he was on the verge of purchasing every vacant lot In the city and a good many homes. Hawkes began to fear that he was single-handedly engineering the inflation of land values for the entire county. By late summer he had a bulging applications from Eastland housewives who wanted to be his secretary.
Meanwhile, the dreary business of compiling the lease records for the Ranger oil field was turning into a quagmire. In most cases the last mineral rights transaction had been in 1919 or earlier. In the first months alter the McCleskey well blew in, promoters had descended on the town and purchased rights from farmers for up to $200,000 per lease. Excursion trains full of wide-eyed investors anxious to own oil wells had arrived from Chicago, Denver, St. Louis, Kansas, Oklahoma, and all points south. Then the leases had often changed hands a second time when the investors got back to their hometowns. In one case, a 160-acre tract had been leased for $100,00 and sold a week later for $200,000. In another, a promoter had carved up and sold it to 43 different people in a Jewish neighborhood in New York. The size of the leases ranged from 230 acres to one ten-thousandth of an acre. The average lease was only 3 acres, and Hawkes needed to lease at least 15,000 acres to secure the entire field; that worked out to about five thousand people he would have to identify. locate, and close deals with.
The larger problem—and one that both Hawkes and Luther Ellison were well aware of—was that Texas Pacific had held on to most of its original acreage through all those years. And it had some of the best property, a 5000-acre block of land called the John York Survey, where many of Ranger’s most famous wells had been drilled in 1918. The only solution was to outlease TP, thereby establishing control of the greater part of the acreage as well as the proven underground reserves. It was the kind of thing that Sun’s lawyers and TP’s lawyers would probably wrangle about for years unless Sun was able to surround the York Survey with its own leases and force its competitor to join the project as a partner.
But by the autumn of 1979, despite everything Hawkes and his landmen had been able to do, the Ranger Project appeared to be all but deed. Hawkes had given the signal to start leasing land wherever they could find it. They tried for a month—and leased exactly four acres. They hadn’t counted on the deep resentment that had been building among Ranger leaseholders for decades. Dozens of marginal operators had come looking for leases before; the usual result had been a token leasing fee, a dry hole, a wrecked landscape, and sometimes a lawsuit brought by the local farmer for damages. Since Hawker couldn’t reveal whom he was working for, the leaseholders he contacted assumed they were in for more of the same if they signed.
Ellison tailed a meeting that October to determine whether whether the project ought to be scrapped altogether. The ever-increasing scale of the rumors in Eastland had progressed from an amusement to an irritant to a real headache. The latent scuttlebutt was that Hawkes intended to buy the. Eastland National Bank, and he realized that his continued presence in the town was seriously inflating property values and causing dozens of to be placed on the market. A businessman had even come to Hawkes’s office one day to show him blueprints for a planned 15,000. Square foot building, where he hoped Hawkes would locate permanently. The rumors, everyone at the Sun rnetfing agreed, must somehow be stopped.
But beyond that was the question of whether the whole exercise was futile. It had taken Sun five months to lease four acres. At that rate the Ranger field would completely leased around the year 3200. Fewer than 10 per cent of the local landowners held lease rights to their property, and the legal lessors were scattered from coast to coast. Finally Ellison—perhaps to test Hawkes, perhaps because he really believed it—said, °I don’t think we can do it.”
“I can do it.” replied Hawk.. And he suggested that, as a final strategy, the company resort to honesty.
So in November 1979, a full six years after the project was conceived, Sun went public with its plans. The company’s representatives told leaseholders exactly who they were, that they wanted to attempt a massive waterflood of the Ranger field, and that they needed everyone’s cooperation to do it. The president of Eastland National Bank wasn’t the only person who felt relieved. As Hawkes had guessed, many of the suspicious lease-holders immediately made deals with Sun, happy to be doing business with a major oil company at last.
But now the Ranger Project became a race with much higher stakes. Already the presence of Hawkes’s team at the courthouse had drawn a few oil field scouts to the area. If Sun couldn’t establish a commanding position in Ranger in a few short months, the speculators undoubtedly would. Fortunately, the sheer complexity and expense of finding the leaseholders worked to Sun’s advantage. With a budget that no independent company could match, Hawkes was ready to go to work in 48 dates at once.
He began by sending all the Robert B. Ross employees hack to Midland and replacing them with his own handpicked team of landmen. They came from every Sun office in the Southwest, and most were bright, eager men in their twenties fresh out of the University of Texas or the University of Oklahoma. But Hawker also needed experienced landmen, and so he added some retired oldtimers who knew their way around wild, messy fields like Ranger.
By late November some twenty land-men had moved to the Ramada Inn, where they huddled like a football team ready to play in the Super Bowl. A bright yellow Sunoco sign went up on the door of the old abstract office, folding tables and chairs were crowded back to back in the three small rooms, and Hawkes’s men began working ten- and twelve-hour days, travelIng all over the continental United States, and running up an astronomical telephone bill. Over the next eight months he team would cost Sun $750,000.
Much of that money was spent simply trying to convince people that they owned oil leases. Hawkes himself journeyed to Lubbock at one point to find a widowed heir to a huge tract of land who kept insisting, “But you must be mistaken. I don’t own any oil.” For two hours she refused to accept Hawkes’s documentation, but finally he wore her down. “Okay, I own it,” she said.
“All right,” said Hawkes, “now l would like to lease your land from you. I’m paying fifteen dollars an acre for acre for a five-year lease.”
“Oh, no,” she said. “I can’t do that. I can’t tie up my land for five years.”
Hawkes summoned the last reserves of his diplomacy and finally brought back her lease.
In the course of their frenetic search the landmen used every tool known to the oil business and a few that they discovered along the way. They generally started with nothing more than a name, an address, and a notary’s signature from the courthouse records; most of those records were dated before 1920. Frorn there, they went to their “library,” which consisted of telephone directories from cities all over America, on the chance that the leaseholder was still living—and living in the same place. If that didn’t work, they called similar names in the book. They sent letters to smalltown librarians in the hope they could find the person or his heirs. And when all else failed, they got in their cars and drove to the town to search through old newspapers, deed records, death certificates, and probate court documents. Two landmen settled in full time at the Dallas and Fort Worth libraries. Others went to genealogical libraries and looked through family Bibles.
One of the most baffling cases fell into a young landman named Tom Hobbs, who was charged with securing a forty-acre lease sold to one Joe Bartles of Washington County, Oklahoma, in 1919. This one sounded like a snap, since the county seat is named Bartlesville. But there was not a single Bartles in the phone book. After exhausting all other possibilities, Hobbs drove to Bartlesville, check. the counhouse, the library, and the few establishments in town frequented by old men. Nothing. He managed to find an elderly lady who gave him the names of three other elderly ladies, and when he found them, they told him they had heard the name Bartles long ago but couldn’t remember when or where. Hol. was finally reduced to accosting old men on the street and saying, “Excuse me, but I’m looking for …” They shook their heads.
Hobbs was on his way out of town, ready to admit he and head back to Eastland, when he noticed an old cemetery. “What the hell,” he thought. He parked the car and walked slowly up and down the rows of tombstones—and there he spotted the grave of Joe Bartles. He wrote down the date of death—it was in 1956—and went the local newspaper to find Bartles’s obituary. Then Hobbs got lucky again: the obituary showed one survivor, an adopted daughter living in Amarillo. Her name was Tarwater, and fortunately there weren’t many Tarwaters in the Amarillo phone book. And, yes, she signed the lease.
Behind Hawkes’s desk hung a giant map of the Ranger field, showing every survey in a twelve-square-mile area. As each lease was signed, Hawkes colored in the map with a yellow marker until finally, by the spring of 1980, there was more yellow on the map than white. Not that there weren’t maddening white spaces, some of them as small as a thousandth of an acre, interspersed among the victories. But it was clear that Sun was winning the battle. The big blank space in the center—the John York Survey, owned by Texas Pacific—began to look smaller and smaller as Sun surpassed TP in total acreage. Luther Ellison was ecstatic—this crazy thing was succeeding after all—and so he decided it was time to call in the engineers.
In the surreal atmosphere of leasing the field, it was easy to lose track of the formidable gambles that remained. First and foremost was the possibility that once Sun engineers were able to take a good hard look at the subterranean geology, they would be forced to admit that a water flood simply wouldn’t work. Larson’s 1973 report indicated that it should work, but Larson was approaching an ultramodern project with caveman’s tools. The second possibility was that Texas Pacific would refuse to go along with the project; it might be possible to run a waterflood around the John York Survey, but it wasn’t likely. And TP’s land had been the most productive of the boom. Now that it appeared Sun would be able to establish a position, Ellison needed some cold, hard data.
For that he went to Charles Dickson, an athletic, sandy-halted engineer who dresses in dapper sweater vests and works in a squeaky-clean office in Midland’s Sun Building. As chief engineer for the huge Midland district, Dickson was fully versed in the esoteric terminology of techniques for secondary recover,’ (like waterfloods) and tertiary recovery (such as polymer injections and mixing oil with carbon dioxide to bring it to the surface). But on April 1, 1980, when Eilison named him Ranger Project manager, Dickson faced the baldest of questions: can we do it?
To find an answer, Dickson joined one other engineer and two geologists in a corner suite of the Sun Building where they could isolate themselves from the day-to-day field operations. “We knew at that time absolutely nothing about the engineering or the geology of the field,” he said. We couldn’t even tell where all the old wells were. There was no Railroad Commission regulation back then, so there was no proration, no spacing of wells, and no laws governing how a dry hole was to be plugged. Some of those guys just threw trash down the hole and covered it up with dirt. If enough mesquite or brush grew over it, then we couldn’t even see it from an aerial photograph. That’s the kind of thing we were up against.”
Dickson assumed that the field was gas driven—unlike the East Texas field, where pressure is maintained by a constant influx of water—but that assumption was based mainly on the fact that so much gas had been flared and vented during the boom. In those days before regulation, the gas was allowed to flow freely to such an extent that sometimes it blanketed the countryside and caused more than a few deaths by exploding when it was ignited by auto exhaust or a cigarette lit near a well. Billions of cubic feet were wasted for lack of a market, and the loss of the gas was probably what killed the field.
Unfortunately, the only way to find out exactly what the field was like underground—this field that had once had some five thousand wells—was to drill it all over again. This is what Dickson decided to do, targeting six prime sites for experimental wells that would tell the geologists something about the size, thickness, and porosity of the reservoir. Even then there would be uncertainties, beginning with the impossibility of knowing exactly how much oil had already been drawn out of the field and what percentage the total that oil represented. Dickson had found several sources on the subject, and they all gave different figures. No enhanced recovery method had yet been invented that can get much more than 40 per cent of the original amount of oil out of a field, so the difference between a field that had been depleted 25 per cent and one that had been depleted 30 per cent could mean the difference between a successful $100 million investment and a white elephant. Finally, Dickson would somehow have to compute how much money Sun could sell the oil for once it was produced—a less important factor now that oil is being decontrolled, bur a consideration nevertheless.
Shortly after Dickson moved into his new office, his whole view of the Ranger Project was altered by a series of secret meetings held two thousand miles away, In Toronto, headquarters of the giant Seagram Company, company officials had quietly put out the word that they wanted to unload their American oil properties and get back to their primary business of marketing liquor. Those properties consisted of an old Texas company—Texas Pacific. Sun seemed like the obvious buyer. Its oil and gas reserves had been declining steeply, it had a less than stellar reputation for discovering oil, and compared to the other major companies, it was extremely poor in land suitable for drilling. TP, on the other hand, had an amazing 70 per cent success ratio in drilling for oil. More important, it was one of the national leaders in enhanced recovery techniques.
A half-dozen oiI companies put together teams of analysts to appraise the TP propenies and considers bid, but Sun prompted them eIL Operating under the code name Tomahawk—to ensure secrecy and keep the price within reasonable limits—executives at Sun headquarters Radnor, Pennsylvania, mobilized sixty people to work full time on the evaluations and, after a mere two months, made an offer so high that some petroleum analysts thought they had taken leave of their senses. On April 11 Sun agreed pay Seagram $2.3 billion for Texas Pacific’s American properties, an amount that worked out to between $10 and $12 per barrel of proven reserves. It was the second-largest cash transaction in the history of American business, and it was a tremendous gamble. If Sun was right, then TP’s older fields and unexplored acreage could propel it into the ranks of the six or seven largest oil companies in the world, but if Sun was wrong and it failed to make major discoveries, then the TP deal could precipitate the rapid decline of a hundred-year-old company. Sun had gambled once before in the seventies—when it tried to gain a controlling interest in the medical supply firm of Becton-Dickenson—but lost out when the federal government famed Sun to divest itself of the stock. A Sun president had lost his job. Now the company appeared to be moving back into the one field it knows well—energy.
The effect of the TP deal on the Ranger Project team was unqualified relief: Hawkes put his yellow marker to work and colored In the John York Survey. Now Sun owned leases on about 16,000 acres, or some 90 per cent of what they considered to be the Ranger field.
For a while after the acquisition was announced, the financial press was openly skeptical that TP could be worth that much money. On paper it just didn’t add up. Sun had paid the highest price on record for proven reserves of oil and gas, and much of that oil was old and price controlled. Three weeks before the deal, Congress had passed the final version of its windfall profits tax, which meant that even $35-a-barrel oil would probably be taxed about $19, leaving only a $4 or $5 margin for Sun’s production costs and profits.
At the time no one mentioned Ranger field as an example of what Sun had really bought, but it was the best possible example. Because TP is a very old company, with leases in fields that have been abandoned for years, much of its oil is not listed on the books as proven reserves. Yet many of these old reservoirs lend themselves to the enhanced recovery techniques that TP specialized in and that Sun plans to pursue energetically.
One indication that Sun intends to follow just this strategy came in September, when after a reorganization of Texas Pacific into the newly christened Sun Texas Company, Sun chairman Theodore Burtis appointed Bennie Franks as president of the subsidiary. Franks had previously been vice president of Sun Production, where he served 28 years as a roustabout, driller, lease operator, and district manager in Colorado City, and he knows secondary and tertiary recovery front to back. “In 1930,” said Franks, “production engineers were doing well if they could get ten per cent of the oil out of a field. But the exciting thing is that today we have eminent scientists who argue with each other over whether we’ll eventually be able to get eighty-four or eighty-seven per cent of the oil out of the ground. That’s how far we’ve come.”
Sun Up or Sun Down?
Ranger will obviously be the major test of how far Sun and TP have come. It’s a gamble as risky as the deepest wildcat well, but if it pays off, it could open a whole new frontier for the industry. Ranger is not the only big field that was overdrilled and wasted; there are similar reservoirs all over western Pennsylvania, Louisiana. Southeast Texas, and Arkansas. Now that oil prices have risen to a level that would justify a $100 million project that might take eight years to begin paying for itself—and that’s what Sun estimates for Ranger—there are untold possibilities for enhanced recovery that compare very favorably with the even more risky investment in synthetic fuels. Everyone will be watching to see what happens in Ranger, because the field has the worst problems an oil company could ever encounter: old unplugged wells spread across it, no core sample information, no pressure, no maps, and no proven technology for making it pay. lf Sun decides to go full speed ahead with waterfloodIng, it will have to run pipeline from Possum Kingdom Lake capable of pumping thousands of gallons a day into the ground—provided there are no prolonged drouths in West Texas. And even then, the engineers may not be able to control the flow of the water. But the lesson here is that for the first time since the field died sixty years ago, there are incentives to try. Ellison would never even have considered starting the project before the decontrol of oil prices.
Last August Sun began the fist experimental well of the Ranger Project, with little fanfare, about a mile south of 1H 20. Ellison and Dickson were half hopirig that it would prove to In more than experimental—that perhaps they would strike flowing oil in some heretofore unknown reservoir. The bad news is that they didn’t strike any active pays; the good news is that the underground geology looked about the way they thought it would. °No surprises,” said Dickson. “Most important, nothing negative that would stop the project.
Appropriately enough, the first new well was drilled on the site of a ghost town that withered away and and died shortly after the end of the boom. Merriman, like many other small towns around Ranger, had been the scene of wild speculation in leases. Legend has it that the landmen offered the members of Merriman Baptist Church $100,000 for the rights to drill in the local cemetery, but they were adamant about protecting the sanctity of the graves. The popular poet Will Farrell wrote a poem praising the pastor and congregation for their brave stand, and a song of the day featured the refrain “Sleep in peace, there will be no oil drilled in Merriman Cemetery.” But now the newest Ranger derrick can be seen from the cemetery, and John Hawkes is trying to work up the courage to ask the church members for a lease.
Whether he gets that lease or not, the Ranger Project, barring any unforeseen setbacks, will be ready for initial water injection sometime this summer or fall. After that—again assuming that nothing goes wrong—the drilling of injection and recovery wells could take another four to six years. And then, if pressure can be restored and the flow of water controlled, Ranger may yet boom again. The local citizens might not notice it, since the oil will he quietly piped elsewhere and most of the royalty owners live in other cities. But there’s a man with blueprints for office 15,000-square-foot office who might be blessed with a permanent tenant.