“What will the folks down in Houston think?”
“They don’t use the name anymore. They’d rather be Exxon.”
“Sounds impressive.”
“It is.”
“What’s the next step?” Browning asked.
“Drill.”
“Do we have any locations yet?”
Pat Holloway laughed. “We’ve got the whole world,” he said.
Pat Holloway’s original idea, when Humble Exploration was formed on May 31, 1974, was to organize and operate drilling funds that would take interests in prospects being generated by Robert Nance, a consulting geologist who was working with Frank West’s Hanover Planning Company in Montana, the Dakotas, and the Red River play.
Holloway had long known that geologists were more important to the oil business than lawyers, even lawyers who bore the scars of working for two decades or more in oil and gas. He promptly issued fifty percent of Humble’ stock to Nance for twelve hundred dollars. Holloway personally took forty percent of the stock for a thousand dollars. Ten percent of the stock was issued to Make Starnes for two hundred and forty dollars.
Within a year, however, Frank West began fearing that his Wall Street bosses would decide that Nance, with all of that stock in his pocket, might have a tendency to favor Humble over Hanover when it came to locating prime prospects, After all. Humble had compensated Nance far more generously than Hanover, which did not share with him any of its promotion revenue on Nance’s drilling deals. In reality, it was a mute point. West and Holloway knew from the beginning that it was not in Robert Nance’s nature to show favoritism. He was honest. He was trustworthy. He could not be bought by Humble or anyone else. Those Wall Street bosses, however, were suspicious of almost everyone. For them, a conspiracy was being woven behind the scenes of every deal.
Nance, long before he became independent, had worked as a young geologist for Frank West’s consulting firm. They had a strong father-son relationship, and Nance had no intention of ever doing anything improper if it might injure the familial relationship he had with his mentor. Besides, Frank West was running a major public drilling funds, and he remained firmly entrenched as Nance’s principal customer for drilling prospects.
Nonetheless, West, aware that the powers on Wall Street were forever looking down on the venture like vultures hanging on a tree limb, told Holloway and Nance that he would feel more comfortable if the geologist was not a stockholder in Humble. Both funds, in the eyes of many, were out in the market competing for the same prospects. West did not want any deal to even hint of impropriety. Robert Nance readily agreed. He doubted if Humble would ever amount to much anyway. Hanover was his bread and butter.
Without any hesitation, he endorsed his stock certificate over to Pat Holloway and mailed it from Billings, Montana. Holloway promptly sent him a check for twelve hundred dollars to repay the cost of Nance’s twelve hundred shares. No debate. No dispute. Robert Nance was removed from Humble Exploration. He was no longer a stockholder who had any financial interest in the company.
Holloway immediately apprised Bill Browning of the transaction, explaining that, as far as Humble Exploration was concerned, nothing had really changed. Nance would continue to bring the company prospects, and Frank West was content to lay off to them any percentage of a deal he did not want to take. It would be business as usual.
“Well, that sounds okay to me,” Browning said, frowning, deep in thought. Then he broached a subject that had been long simmering in his head. “But now that you own ninety percent of Humble’s stock, he said, “don’t you think you should give me part of the percentage you got back from Nance? After all, I shouldn’t need to remind you that I am by far the largest investor you have.”
His request was not a surprise. Holloway had been expecting it. “Here’s the problem,” he told Browning. “It would give you preferential treatment over all of the other investors in Humble’s drilling funds, and that would not be fair to the other investors. If I give you some stock, those other investors might demand that I give them stock as well. I could end up with nothing for all of the work I’ve been doing. No stock. Not even a salary. And that would certainly not be fair.”
Bill Browning only smiled. He fired his next shot. “Well, Holloway,” he said, “why don’t you just call them all up and see if any of them have any objections to the biggest investor in Humble’s drilling funds having a ten percent interest in the company. See if they demand any stock for themselves.”
Holloway never made the call. He didn’t have to. It wouldn’t matter, and he knew it. The other investors would neither object nor demand any stock of their own.
A few days later, over drinks, Holloway told Browning that he had mailed him a stock certificate representing two hundred and forty shares of stock. He now owned ten percent of the outstanding stock in Humble. Holloway never asked for payment. And Bill Browning never bothered to pay his two hundred and forty dollars for the stock.
He simply kept what he was sent.
Soon after Pat Holloway formed Humble Exploration and resigned as attorney for Hanover, he and Frank West were approached by petroleum engineer John LaRue, who had a proposition for them to consider. “I’ve found this kid who used to work for Texaco, and I want to hire him,” LaRue said. “He works all the time, has a good head on his shoulders, and, from what I’ve been able to find out, he’s one of the better geologists to come down the pike in a long time.”
“So what’s the problem?” West asked.
“I can’t afford him unless I get a lot more business,” LaRue answered, “and I don’t want to lose him. I’d like for each of you to pay me a retainer each month, and I’ll use the money to bring him on board. You’ll have first call for his services any time you happen to need them.”
“You think he’s that good?”
“He’s been all over Texas, Louisiana, Africa, Australia, and the Middle East.” John LaRue shrugged and continued, “He’s been around, and they tell me that when it comes to understanding what goes on in an oilfield, this kid is an absolute genius.”
“You think he can find oil?”
“Always has.”
“How much money do you need?”
“Four or five hundred dollars a month from each of you,” LaRue said. “Won’t hurt your checkbook any, and it would help me a lot. It’d be a real loss if the kid went somewhere else.”
“What’s his name?” Holloway asked.
“Ray Holifield.”
Pat Holloway thought it over for a minute. He knew he wouldn’t miss the money. Spent more than that on either a good or bad night at the Petroleum Club. Besides, this Ray Holifield fellow might be able to go out and generate some new prospects for them. They already had a straight line to investors, and even with plenty of acres already sewn up, they were always looking for some new hot spot to drill.
He glanced at Frank West. West nodded. “It’s a deal,” Holloway said. “Now, let’s find out if this Ray Holifield is as good as you say he is.”
Chapter 8
Max Williams made the decision to stay with oil exploration. The eight wells he and Irv Deal had found in Palo Pinto activated a mechanism in his brain that he figured was not unlike that of a high-stakes black jack player betting his life and most of his fortune on the next turn of the card, which might well be his last. Oil had seeped into his blood. It occupied his every waking hour.
Oil triggered good money, but it was slow money. He needed revenue to move forward. He could not wait on those royalty checks from his last wells before