The Very, Very Rich and How They Got That Way (13 page)

In addition, all of us who operated independently often found ourselves facing heavy competition and opposition from major oil firms. Some of these huge companies did not always abide by Marquis of Queensberry rules when they engaged in legal or financial infighting to smother an independent who appeared to be growing too big or too fast.

Wildcatters developed traits and techniques that enabled them to stay in business and to do more than merely hold their own against the petroleum industry’s behemoths. We became flexible, adaptable, and versatile – adept at improvisation and innovation – if for no other reason than because we
had
to in order to survive. For example, the big companies employed vast numbers of specialists and consultants, administrative personnel and office workers, housing them in large and expensive offices. We, the independents, found our experts among the hard-bitten veteran oil-field workers who formed our prospecting and drilling crews, or we relied on our own judgment and experience to solve our problems as they arose. We did our own administration and paperwork – keeping both to a minimum. As for our offices, these – more often than not – traveled with us in the mud-splotched automobiles we drove from one drilling site to another.

In my own case, as I have said before, I was lucky – very lucky. I made many profitable deals and brought in several producing wells in the months after I first struck oil on the Nancy Taylor Allotment site. The Getty Oil Company prospered. I was named one of the company’s directors and elected its secretary, but this did not mean I exchanged my work clothes for a business suit. Notwithstanding my heady new titles, my work was still in the oil fields – and on the drilling rigs. My role in the company’s affairs remained the same as it had been: I bought and sold oil leases and prospected and drilled for oil.

As the Getty Oil Company’s wealth increased, so did my own in proportion to my 30% share in the firm – and I was also embarking on profitable ventures on my own account. All these things kept me very busy – too busy to pay more than cursory attention to how much money I was actually making. Then one day I stopped and took detailed stock of my financial situation. I suddenly realized that I had gone a very long way toward accomplishing what I’d set out to do in September 1914. I had built the foundations of a business of my own in the American oil industry.

I was not quite 24, but I had become a successful independent oil operator. And I had made my first million dollars. I was a millionaire!

Until then my life had been devoted chiefly to growing up, obtaining an education and establishing a business. Now, at 24, I found I’d made enough money to meet any personal requirements I might conceivably have in the foreseeable future. I made a headstrong snap decision to forget all about work thereafter and to concentrate on playing, on enjoying myself.

My decision was influenced – at least in part – by the fact that there was a war raging in Europe. Although the U.S. had not yet entered World War One, I felt certain that American participation in the conflict was inevitable. I’d already filed official applications to serve in either the air service – my first choice – or the field artillery when and if the U.S. declared war. I was sure it would be only a matter of time before I received my orders, and I wanted to relax and have fun before they arrived.

My mother, father and I had made our permanent home in Los Angeles, California since 1906. I’d attended school and college in California before going on to Oxford and then, later, starting my business career in the Oklahoma oil fields. I loved California and the easy, informal and extremely pleasant life that prevailed there in those days. Thus, it was only natural that I should choose Los Angeles as the place to enjoy the money I’d made in the oil fields.

“I’ve made my fortune – and I’m going to retire,” I announced blandly to my startled parents.

Neither mother nor father was pleased with my decision. Both of them had worked very hard in their own youth. When first married, my mother had continued to work as a schoolteacher to help provide my father with the money he needed to put him through law school. Both of them firmly believed that an individual had to work to justify his existence and that a rich person had to keep his money working to justify its existence. My father tried to impress upon me that a businessman’s money is capital to be invested and reinvested.

“You’ve got to use your money to create, operate and build businesses,” he argued. “Your wealth represents potential jobs for countless others – and it can produce wealth and a better life for a great many people as well as yourself.”

I’m afraid I didn’t pay much attention to him – then. Later I was to realize the truth of what he said, but first I had to try things my own way. I owned a spanking new Cadillac roadster, good clothes and had all the money I could possibly need. I had made up my mind I wanted to play, and with these prerequisites I encountered no difficulty plunging full tilt into the southern California-Los Angeles-Hollywood whirl of fun and frolic. Although the United States entered the war, my call-up was first delayed, then postponed, by bureaucratic snarls, and finally I was informed that my “services would not be needed.” I consequently spent the World War One years playing and enjoying myself.

It took me a while to wake up to the fact that I was only wasting time and that I was bored. By the end of 1918 I was thoroughly fed up. Early in 1919 I was back in the oil business – not a little abashed by the “I told you so” smile I got from my father when I informed him that, having retired at 24, I was coming out of retirement at 26!

In 1919 oilmen’s attention was already shifting from Oklahoma to southern California, where new producing areas were being discovered and developed. A great new oil rush was in the making and I was among those who wanted to be in on it from the beginning. My initial oil-prospecting venture in southern California was a fiasco. I drilled my first California well on the Didier Ranch near Puente, but the well proved to be a dry hole.

The luck that had stayed with me in Oklahoma had taken a brief holiday, but it hadn’t deserted me. Subsequent tries were considerably more successful. I drilled several wells in the Santa Fe Springs, Torrance, Long Beach and other southern California areas, and most of them proved to be producers, some of them sensational producers. I spent most of my time in the field working on the drilling rigs with my men. This habit, formed in Oklahoma, paid many handsome and unexpected dividends. Not the least of these stemmed from the drilling crews’ reaction to the presence of a working boss on the job. The men felt they were partners with the boss in a mutual effort rather than merely employees of some corporation run by executives they never saw and who had probably never set foot on a drilling platform in their lives. Morale – and production – soared as a result.

This was important, for with new wells being drilled by the hundreds throughout southern California, there was an acute shortage of experienced oil-field workers. The personnel managers of most large companies engaged in wild scrambles to find the necessary manpower for their operations. They bid frantically against each other in the labor market, offering special inducements and benefits to anyone who’d ever had any experience working on an oil rig.

Most old-timers resented the implication that they had to be bribed with frills to do an honest day’s work. They preferred to sign on with wildcatting operators who offered no fancy extras but who spoke their language and worked side by side with them on the drilling sites.

I’ll never forget the time I began drilling on a property not far from the site on which a major oil company was drilling a well. Carrying its employee-inducement program to ludicrous extremes, the firm had designed and built what its press agents glowingly described as the last word in drilling rigs.

The entire rig was steam-heated all the way up to the crown block. A neatly raked gravel drive led to the site. There were hot showers for the men and even a laundry that washed their work clothes while they waited! Early one afternoon not long after I’d spudded my well, a grizzled roughneck appeared on my site and announced that he wanted to see the boss. When I was pointed out to him, he came over and wasted no words asking me for a job.

“Are you working now?” I asked.

“Yeah,” came the sour reply.

“Where?”

“Over there,” the roughneck replied, nodding his head toward the deluxe drilling rig. There were no home comforts available for my crew, and I told the man so. And, I added, I couldn’t understand why he would want to leave a job that offered such luxuries for one on my relatively primitive operation.

“I’ve been on that rig for five months,” the roughneck growled unhappily, “and we’ve only gotten down 4000 feet!” I laughed. Four thousand feet in four months was a ridiculously slow rate for drilling through the type of soil formations to be found in that particular field.

“How long do you think it’ll take me to get down that far?” I asked.

“From the looks of you – about ten days!” the old-timer answered with a broad grin. “That’s why I’d rather work for you than for that cream-puff outfit over there. . . !”

He got the job and stayed on my payroll for many years. As a footnote to the story, I might add that my well was drilled in record time and proved a good producer. The “last word” in drilling rigs brought in a dry hole and was finally abandoned.

Another good example of what close teamwork and mutual confidence between boss and crew could accomplish can be found in the story of how my men and I liked the “insoluble” problem of a certain oil lease.

The lease was on a tiny piece of property in the midst of a forest of oil wells in the rich Seal Beach, California, field. By some fluke the lease had been overlooked by the firms that were operating there. A company in which I held a substantial interest acquired the lease but was about to write it off as a dead loss. Everyone agreed that nothing could ever be done with the property. In the first place, it was a plot barely larger than the floor area of a small house. In the second, the only right-of-way providing access to a road was over a strip of ground several hundred feet long but less than four feet wide. It was impossible to get supplies and equipment to the property by truck over this constricted path. Even if it had been possible, the postage-stamp-size plot would not have accommodated a regular-size derrick and drilling rig. The companies holding leases on adjacent properties refused to grant any right-of-way over their sites, for if a producing well was brought in, it might diminish the production of their own wells, since it would be pumping oil from the same pool.

“Forget the lease,” associates with whom I discussed the matter advised me. “You’ll never get a well drilled there – not in a million years.”

Stubbornly I insisted there must be a way. I put the problem before the men in whom I had the greatest confidence, the members of one of my drilling crews. They listened to me, and their reaction was the same as mine. They considered the problem an irresistible challenge.

“Let’s go up and look at things, boss,” a hard-bitten driller grunted. “We’ll find some way – don’t worry.” Several men and I went to survey the situation firsthand, and we found that it did look fairly hopeless.

“I guess we could drill the well with an undersized rig,” the driller mused after thinking things over. “If you could get somebody to design and build it, we could set it up – but I can’t figure how we’re going to bring everything we need in from the road. . . ”

The obstacle provided by the limited right-of-way seemed insuperable, until my mind began to turn over the driller’s suggestion about a miniature drilling rig. If we could drill with a miniature rig, then why couldn’t we solve our transportation problem with a miniature railway? It was a perfect solution: a narrow-gauge track and a car or two on which to bring the disassembled “baby” derrick and supplies and equipment from the road to the drilling site.

Mulish obstinacy? A desire to prove that we were able to accomplish what everyone else considered impossible? Possibly – even probably. But both the miniature rig and the miniature railway were procured. The former was moved in sections over the latter and assembled by hand on the microscopic plot of ground. The well was drilled – and we struck oil.

I recall other memorable strikes during the 1920s. Among them is the one I made in the so-called Athens Field in the southern suburbs of Los Angeles. I acquired the plot in question for something over $12,000. Because I was operating entirely on my own account and knew that I would be stretching my available cash resources thin before completing the first well, I elected to act as my own drilling superintendent. Among the men I hired for my crew were three of the finest drillers in the oil industry: Walter Phillips, Oscar Prowell and “Spot” McMurdo. We completed the first well on February 16, 1925, at a depth of 4350 feet for an initial daily yield of 1500 barrels. A short while later I brought in the second well on the site for an initial production of 2000 barrels per day. In the next nine years the two wells on the Athens property were to show over $400,000 excess recovery – clear profit over and above all costs and expenses.

Even more spectacular is the story of the Cleaver Lease in Alamitos Heights, which I bought with a personal check for $8000 in October 1926 from a man who had purchased it for $4000 only a few days before and who wanted to make a quick profit.

I spudded well number one on February 21, 1927, and subsequently drilled three more wells on the property. All proved exceptional producers, bringing up a total of more than 17,000 barrels daily. Between 1927 and 1939 excess recovery on the Cleaver Lease wells was nearly $800,000 – a 10,000% profit on my original investment. Yet, within a few weeks after the first well came in, I was not only close to losing a fortune but also close to losing the lease itself. Behind this apparent paradox lie two stories. One illustrates what the average wildcatter faced when he jousted with certain major oil companies. The other proves that while some large firms had no compunctions about strangling an independent operator, others were ready and willing to give him a break – and even a helping hand.