[AdamB]

In the dusty heart of West Texas, rows of tall white wind turbines and rust-colored working pump jacks bob up and down along the vast rugged landscape. It’s a visual juggernaut but make no mistake – this is shale country and in this part of the Lone Star State, legends are born and billions are made every single day. Take Texas natives Cody Campbell and John Sellers, for example. They met in the seventh grade, played football together at Canyon High School and ended up at Texas Tech University. Cody Campbell had a brief stint with the NFL's Indianapolis Colts before starting a career in the oil business (Getty Images) Campbell went on to the NFL, playing as an offensive guard with the Indianapolis Colts while Sellers made money in real estate. In 2009, the two friends started Double Eagle Energy Holding, where they signed

Texas shale oil boom yields rags to riches tales...

[rockdoc123]

An interesting article on yet another rags to riches story of someone with virtually no oil and gas background making it big in the industry. Over the years some of my colleagues would joke "it seems like everyone made a bundle in the oil industry except me". Their point being is you always hear about the 5% of geologists, engineers, land guys and other wildcatters who made millions in the business whether it was shale or a startup in SE Asia or selling a small company in Latin America. What you never hear about is the other 95%, many of whom spend their lives at large companies in technical roles where they are well paid but definitely will never be mega wealthy or have bounced around from small independent to small independent with minor success but never being involved in one of the seemingly elusive "ten baggers". It shouldn't be a surprise. The global average exploration success rate according to Wood Mackenzie is 10% whether you are a big multinational or a small independent. So the odds are against you. This isn't realized by the general public who may have read the very exciting The Prize by Daniel Yergin (a must read if you are interested in the history of the oil and gas industry BTW)...it would seem to them this is all pretty easy. Certainly, the Daniel Plainview character in There will be Blood makes it look like you just have to guess where the oil is and chances are it will be. But I'm afraid there are a lot more sad stories out there of folks who lost it all in business, being in the wrong place at the wrong time and perhaps making a wrong decision. And then there are the "wide boys" who got lucky once in spite of themselves and mistook that for intelligence or industry savy and then proceeded to lose their shirt several times over (I know a few of those). For those that have had a bit of luck garnished with some knowledge and attention to the bottom line you are more likely to hear from them "there but for the grace of God go I" than any sort of statement suggesting they got where they did because they were just brilliant.

[Tanada]

Americans and at least the Canadians and British who I know personally love rags to riches stories because you can always imagine yourself in the starring role in your own mind.

Of course in the real world Cinderella most likely died of abuse before her 21st birthday instead of marrying a Prince. Even that ignores her biographical background as the daughter of a nobleman, not a peasant girl of lower class status. Yes dear friends, the Cinderella of the original story was born with a metal spoon in her mouth and a full set of dishes, not in a peasant hovel eating off a board with her fingers and a wooden spoon. Thus her Rags to Riches story, most commonly known to western English speaking people, is the story of a noble Lady raised to high rank after being mistreated. Much like the sanitized versions of Robin Hood where we gloss over the fact that Robin was a nobleman who got into a dispute with King John and who was pursued by the Sheriff, (analogous to an American Federal Marshal) appointed by King John to hunt him down for trial and execution.

Telling stories about rebelling or downtrodden nobles who win has fallen out of favor in the modern world so the nobility angle is glossed over, but it comes back to the old saying "It takes money to make money". My own father and two of his brothers in law invested in wildcat drilling in Michigan and between them funded three wells, all of which failed. When they ran out of money and had to quit the wildcatter found other investors and went on to drill a fourth dry hole, and then on his fifth struck oil and paid those investors off handsomely. I however did not grow up with oil money LOL, far from it. My father had to start over because he was broke as did one of my uncles in the partnership, the third was fortunate to live on the inherited family farm because he was married to my fathers oldest sister, but even he had to spend many years rebuilding his financial stake lost in the oil venture.

[Cliffhanger1983]

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[rockdoc123]

Great story Tanada. I too had an uncle who was best described as a "wide boy", always doing deals, never satisfied. He made millions in mining, lost it all in oil and gas, made millions again in oil and gas and lost that too. But, boy oh boy, never lost that optimism, eventually was hit by a bus (yes really).

I used to always point out to the young geologists just starting out that they needed to familiarize themselves with the story behind Spindletop. Wildcatters who would not give up and stuck with it through numerous failures until the final discovery that really started the US oil and gas industry. Today Captain Lucas' name is well known in Texas but folks completely forgot Patillo Higgins and George Carroll who essentially went broke drilling in the same area before Lucas showed up. Yergin did a particularly good job of piecing together that story, in fact, I think I may just pull out that book and read it again.

[ROCKMAN]

Doc - Best near miss story I personally saw. A buddy from my Mobil Oil days, Mike Harris, was working for a legendary Lafayette operator drilling a very rank wild cat in Cameron Parish. Got so deep below offset geology had no idea where he was: drill a few hundred feet and log the well. Repeat. Repeat. And then ran out of money, abandoned the well and lost the lease. Mike worked the data again and finally came up with a reasonable story that they had gotten very close to the target reservoir.

But before he could raise the money Exxon took the lease and drilled right next to his abandoned well. Just 300' below where Mike stopped drilling XOM discovered a 1+ tcf field. And Mike had a 2% overriding royalty on his original we'll.

A shame because Mike was one of the nicest guys in the business. Many years passed and he was working at Devon when I started consulting there. Mike and his redhead beauty of a wife always wanted a posting in S America and they finally got it when Devon transferred him there to handle Deep Water projects. There a few months when they flew to Paris for a school and some R&R to celebrate his 60th birthday. They were on the Air France flight that went down in the Atlantic in bad weather. They were the only two Americans onboard. Just one more memoir I didn't go to...gave up on them years ago.

They missed the Big Payday but still had a good life.

[coffeeguyzz]

Great stories, guys.
Thanks for sharing.

[rockdoc123]

Doc - Best near miss story I personally saw.

I have one that would knock your socks off...600 MMB that I recommended we do but the Board killed. Chinese walked in and made the discovery.
Won't say anything more.

[ROCKMAN]

Doc - Being a development geologist most of my career the brick walls I slammed into were not finding the reserves the exploration divisions mapped for their discovers. Worst story: first field development project of my career: offshore GOM. Mobil drilled 2 expendable wells that both found some pays. Exploration geophysicists stretched pays to all the untested fault blocks. Risked reserves: 25 million bo and 80 bcf. Set platform and turned over to development division. I was required to drill based on the exploration maps. Which was OK since seismic showed all the faulting just fine and the structure drilled up as mapped. But my FIRST 5 DEVELOPMENT WELLS off the platform were DRY HOLES. The 2 wild cats found the only oil/NG reservoirs on the highly faulted salt ridge.


Reserves went from 25 million bbls to 1 million bbls and 80 bcf to 20 bcf. And only got that because the development group mapped some stacked pays in the very edge of the corner of the 5,000 acre lease block. A target the exploration division didn't even map.

For the rest of the gang. Expendable hole: an offshore well drilled to evaluate what's there but can't be completed because water is too deep. Need to drill producible wells off of a platform but can't justify setting one until you have a handle on reserves. So EH's are plugged and abandoned. So how many EH's are drilled offshore? Depends on the company: Shell Oil might have drilled 4 or 5 on that lease before setting a platform. OTOH Mobil Oil preferred drilling a minimal number.