including the pitfalls, the risks, and the uncertainties associated with oil exploration. Schedule D operators made sure that their brochures and phone calls pointed out the hard truth of it all. The investment has no relationship to the ultimate cost of the well. This is a very speculative venture. The odds of making money are slim at best. They also duly listed all of the best fields and best wells they had found, or at least named the great fields where they had drilled or owned a small percentage of a well, giving them the credibility and credentials they needed to be recognized as successful oil operators.
Some Schedule D operators might raise two or three times the actual cost to drill and complete a well from several hundred investors. Many of the investors bought shares for as little as five hundred dollars, which gave them less than one percent of the well, but everyone wanted to be part of an oil deal. Such Schedule D operators often ran bucket shops, single rooms full of telephones and telemarketers to man them. They placed calls from sun up to sundown, looking for small investors. The more, the better.
For many operators working on the shady side of the street, a well might indeed cost them two hundred thousand dollars to drill. By phone and by mail, tracking down hundreds of small-time, two-bit investors, they might generate a million dollars or more. It made no difference to them whether the well was good or bad. An operator had eight hundred thousand dollars he could carry to the bank.
It may not have been ethical. On some deals, it probably wasn’t even legal. Max Williams and Irv Deal scorned the practice. It gave a lot of good, honest, decent operators a bad name. They both had known for a long time that a man’s reputation might well be his greatest asset.
Terry Moore had been right when he said that Ted Clifford wanted to meet with Max Williams. Clifford was not a man who had time to waste. He had a job to do, and he was ready to get it done. He was blunt. He was up front. He never beat around the bush. “How many locations do you have?” he asked.
“We’ve already drilled several wells,” Williams told him. “They’re making a little money. And I have more locations if those wells turn out to be profitable.”
Clifford stared out the window and scratched his face, deep in thought. He was not and had never been accused of being a dabbler in the oilfield. He wanted what was his, always trying to figure out a way to acquire what was somebody else’s as well. “Tell you what I’ll do,” he said at last. “I’ll take all of your leases, pay you fifty dollars an acre for them, and give you twenty-five percent of production. It’s good money if the wells hit, and I’m betting I can make them hit.”
Clifford caught Max Williams at exactly the right moment. He had grown weary of the day-to-day, phone call-to-phone call, time consuming chore of raising money, and he needed at least a few new investors to cover the production cost of every new well that went into the chalk. Williams kept close tabs on the total cost of drilling. He promoted but never oversold a well. He and Irv Deal took their money and their profits only when he found oil. Dry holes could ruin them. There was no financial cushion. Drillers seldom ever agreed to send their drill bits down into the deep earth if the money wasn’t there.
Ted Clifford would now be responsible for underwriting those costs. Williams never liked to lose control of a well, but Clifford’s proposal was fair enough, he guessed. Under the circumstances, it might be the best deal he would it get.
Max Williams pocketed his forty dollar-an-acre profit for Windsor/U.S. on the twenty-two hundred lease acres, almost ninety thousand dollars, and took the road north toward Dallas. He was still wondering what the notorious Austin Chalk had in store for him. As far as he was concerned, Ted Clifford could fight it out in Pearsall on his own with nobody looking over his shoulder. Good luck, and God bless. At the moment, Max Williams had the big chalk well on his mind.
Chapter 10
Back in Dallas, Max Williams spent the morning, reading through various and assorted production reports in an effort to better determine his position in the Pearsall chalk. Found a little oil. Made a little money. Not much. But a little. Could have been better. He stood and stared out the window toward the Dallas skyline. The next time in the next field, he vowed to himself, it would be.
At Preston Trails that afternoon, he ran into Jack Stroube. Nothing unusual about the chance encounter. Both men occupied offices in the Addison State Bank Building, and they saw each other virtually every day either at work or the country club.
Jack Stroube and his brother Bill were independent oil producers themselves, and they were well aware that Williams had been in Pearsall, tackling the chalk. Their father, H. R., had gained notoriety as a key figure behind the further development of the famed Corsicana Oilfield during the 1920s.
H. R. Stroube had broken into the oil business as a boll weevil roughneck in the Burkburnett Field, but, by 1921, he was broke, and, as his son recalled, was turning handsprings for hamburgers and hook slides for chili. All he had to his name was a junk pile, baling wire rig and a string of drill pipe. He hocked the pipe for money to ship his rig to the next promise of oil, a transaction that brought him to Corsicana. He hired his water, fuel, rig building, pit digging, and tool pushing people by giving them 1/256th interest in the wells he was drilling. He did not have any loose cash to pay them. His son Jack recalled, it was so dead in Corsicana you could hear your hair grow on Main Street.
H. R. Stroube drilled the first of four wells on a two and a half acre lease. It came in, Jack Stroube said, flowing something that looked more like red barn paint than oil. It would, however, make a hundred and seventy-five barrels of oil a day. Between 1924 and 1971, those four wells produced nine million barrels of oil.
Jack Stroube once wrote: After well number two had averaged twenty thousand barrels per day for four days, daddy and Cornie found themselves oil poor – potentially rich but short on cash. They didn’t know how long it takes to get titles cleared, division orders signed, and how pipeline companies love to ride on your money. They called Humble in Houston and told them they would like to draw a little on account, on account of they needed a little walkin’ around money. The Humble people said sure, to meet their pipeline superintendent, Ralph Hanrahan, in Houston, and he would hand them a partial payment. Daddy caught the train to Houston, still in is oilfield clothes, lace top boots, and all. He toted up the bills on the ride down, figuring if Humble would advance them around $20,000, they could pay off most of their debts. When Hanrahan handed him the check, on first glance he thought it was $10,400. He told Hanrahan he was hoping for at least $20,000 and that $10,400 just wouldn’t do it. Hanrahan told him to take another look at the check. It was for $104,000.
When Jack and Bill Stroube settled into the oil business, they were only carrying on a family tradition. It was said of the two brothers: Jack can spend more money at a funeral than Bill can at the State Fair. Jack Stroube would always be fascinated with the search for oil. He sat down with Max Williams over lunch and said, “I hear you’ve been doing some operating of your own down in South Texas. We’ve drilled a few wells in and around Pearsall. The chalk’s a bitch.”
Max Williams grinned. He wouldn’t disagree.
Stroube paused a moment, searched back through his memory, then asked, “Do you know anything about that big chalk well down near the airport in Giddings?”
“If you’ve been in the chalk at least a day or two, you’ve heard about it,” Williams said. “That’s about all anybody ever talks about. But no one I’ve met has ever mentioned it being in Giddings before. Maybe that’s the well I’ve been looking for.”
“From what folks who’ve been there keep telling me,” Jack Stroube said, “it’s
