Bryan Burrough

by The Big Rich: The Rise;Fall of the Greatest Texas Oil Fortunes

  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.e

  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.

  III.

  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 ac
tion.

  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.

  As he did, he received a call from Humble’s Wallace Pratt; alone among the majors, Humble was willing to bet Strake was sitting on a bonanza. “Well,” Pratt said, “Humble was too big and smart to see what you saw. You brought us this thing and we turned you down. I guess we’re getting ready to pay for that mistake.” He asked how much Strake wanted for his acreage. Strake, still penniless, offered meager terms for half his leases: $500,000 up front, plus $3.5 million out of oil proceeds. Humble took the deal and began a discovery well.

  On June 5, 1932, the Strake No. 2 well struck oil at five thousand feet, a geyser of black crude that arced high over the surrounding pines. Strake had been right about everything. Within ninety days another seventy-five operators had begun drilling in the area, and by the end of the year the Conroe field would be recognized as the state’s second largest, behind only East Texas, and the third-largest oil field in the United States. Even after the Humble sale, Strake held on to nearly a third of its acreage, holdings worth tens of millions of dollars in the coming decades. Overnight he became the third-wealthiest oilman in Houston.1

  IV.

  While East Texas made fortunes for Hunt, Murchison, and other oilmen, it ruined Sid Richardson. With prices for the new, high-quality crude driven as low as ten cents a barrel, the majors saw little reason to buy the remote, sulfur-laden West Texas oil Richardson was selling. Cash from his best wells in Ward County shriveled to almost nothing. In January 1930 his income was twenty-five thousand dollars a month; by December it had fallen to sixteen hundred dollars a month, and the bank took every cent.

  In a matter of months Richardson went from the penthouse to the outhouse—literally. He moved out of his top-floor suite at the Blackstone Hotel into a forty-dollar-a-month maid’s room. When he couldn’t afford that, he moved into a twenty-five-dollar-a-month room at the Texas Hotel; when he couldn’t afford even that, he was evicted and sued for back rent, at which point one of his closest friends, Amon Carter, publisher of the Fort Worth newspaper, gave him a room at the Fort Worth Club for free. When he was evicted from his office, Richardson set up business at a downtown drugstore. If he was out, the soda jerk, a man named Jack Collier, answered the pay phone, “Sid Richardson’s office.”

  His only hope was to find more oil. Murchison begged him to come to East Texas, but he wouldn’t; all his leases and contacts remained in remote Ward and Winkler Counties on the New Mexico border. He was determined to keep drilling, but his credit at West Texas oil-supply outfits was running low. When the inn in Monahans threw him out, he fled to the new hotel in Kermit. When the Kermit hotel threw him out, Richardson resorted to bunking at a ranch outside town. In desperation he resorted to poor boying, paying his men with groceries and the promise of an eventual paycheck. During the Depression poor-boys like Richardson paid drillers and toolies ten to twelve dollars a day in oil, if it was found. If it wasn’t, they received whatever a driller could come up with. Richardson, who kept a chronically overdue account at the general store in Kermit, became reknowned for paying his men in bread, eggs, or milk—whatever they needed to eat.

  In 1931 Richardson managed to drill another well on the O’Brien Ranch in Ward County, but the gusher he needed turned out to be a fountain; whatever profits he saw went to his banks. Worse, the well took the last of his money. By early autumn Richardson was flat broke. He was convinced there was more oil in Ward County, as he had argued in vain as he made the rounds of the banks in Fort Worth and Dallas. Temporary relief came in late October when, with Clint Murchison’s help, Richardson managed to coax $110,000 out of Nathan Adams at First National of Dallas. The money allowed Richardson to spud a series of new wells, on the Estes and Scarborough ranches in northern Ward County. Several were meager producers, but by mid-1932 Richardson’s cash flow had slowed to a trickle. His creditors, including the oil-supply companies that leased him his rigs and piping, began to sue. There was no way he could begin to repay his debts.

  Subpoena servers began hounding him everywhere. Whenever Richardson stepped out onto a Fort Worth sidewalk, he watched for one. In later years he told of one creditor who tracked him down while he and Murchison were out hunting. In desperation he turned to Murchison for more relief, and
Murchison began covering his loan payments. A year later Murchison would take over the First National loan entirely.f For collateral Richardson signed over his last leases on the O’Brien Ranch.

  In later years Richardson often said he had been so destitute he was forced to abandon the oil business for several years. Like so many of his tales, this was an exaggeration. If he gave up wildcatting at all, it was likely only for several months, probably during the winter of 1932-33, when reports of his drilling disappear from the San Angelo newspaper. According to Bass family lore, Richardson was able to resume drilling only after his brother-in-law, Doc Bass, refused his entreaties for one last loan. It was his sister Annie who dipped into her purse and gave Richardson forty dollars. It was with this money, Richardson claimed, that he bought train fare for one last trip west.

  The story is apparently true. According to a rare interview his nephew Perry Bass gave the Dallas Morning News in 1984, the Bass family was vacationing in New Orleans in March 1933 when Richardson appeared, asking for a loan. When Doc Bass refused, Annie gave him forty dollars her husband had given her to bet on a horse; the “Old Family Friend” says it was actually four hundred dollars. Whatever the amount, Richardson used it for train fare to Ward County. As it happened, it was the last time he and Doc Bass ever spoke. One week later, having returned to Texas himself, Bass dropped dead of a heart attack at an Austin hotel.

  While the story may be true, however, one suspects the $165,000 Clint Murchison persuaded First National of Dallas to lend Richardson a month later, in April 1933, was a tad more important. Richardson used the money to spud a series of four new wells on the Scarborough Ranch in Ward County. In the fall of 1933 all four struck oil, but not much, and not nearly enough to repay his debt. Once again he had found a babbling brook. What he needed was the Amazon. For officers at the First National banks of Dallas and Fort Worth, Richardson was a nightmare. His debt now approached $1 million. Yet they couldn’t simply foreclose; his assets were minimal. They could either write off their loans and take a huge loss, or find a way to make Richardson a success.