The border war may be on, as Mobil drills a rank wildcat six miles north
of the metropolis of Telephone, Texas, and just 660 feet from the Oklahoma border. (That hole better be straight or there are going to be problems!)
Despite no drilling in the area in the past 15 years, Texaco reports plans to drill a wildcat in central Florida, six miles northeast of Wewahotee. (Sounds like a name out of a John Wayne western.)
U.S. active rig count: 945
President Carter starts a flap over his support of a plan to sell 1.5 million bbl of heating oil to Iran at $0.55/gal, while Americans will soon be paying $0.90/gal. (Sound familiar?)
Update on the above…National Iranian Oil Company Chief Nazih is reported to be saying that Iran doesn’t really need the fuel and may sell it at a profit. (That, too, sounds familiar!)
U.S. rig count: 2,256
Exxon, after spending $775 million on cleanup operations and amid continued criticism from environmental groups, reports that shoreline cleanup in Prince William Sound and the Gulf of Alaska is now 95 percent complete, with more than 1,000 miles treated.
On a related topic… Repairs have begun on the Exxon Valdez at National Steel & Shipbuilding in San Diego, where they report finding rocks weighing as much as 6,000 pounds lodged in the tanker’s hull, while stating they have never done repairs to a ship anywhere near as extensively damaged as this one.
WTI crude: $19.37/bbl
U.S. rig count: 936
THE REST OF THE YARN
This month, we continue our look back at the rise and fall of wildcatter Glenn McCarthy, as The Equitable
is on edge and McCarthy just keeps on spending.
All the activity and expense associated with the Shamrock Hotel had McCarthy’s primary financial backer, The Equitable, on edge. On June 30, 1949, three months after the Shamrock’s opening, its board was given a fourth, updated report on McCarthy’s oil reserves. The valuation came in at $58 million, down $15 million from the previous report, but still enough—just barely—to cover his outstanding loans.
For Equitable executives, the first sign of real trouble came not from the oil fields or the Shamrock, but from the chemical plant McCarthy had been building east of Houston in 1946.
The plant planned to strip liquefied petroleum gases out of natural gas and, using a technology called “The Bloodworth Process,” convert them into methanol for use as an antifreeze additive. Unfortunately, the plant didn’t work. Engineers spent months tinkering with equipment but could never figure out why, while McCarthy spent millions replacing machinery before finally giving up.
Equitable had first realized the plant was in trouble the previous summer, when McCarthy approached its executives for money to fix it.
They politely declined. Undeterred, McCarthy pried $15 million from the Metropolitan Life Insurance Company in return for a lien on all his chemical- related assets and a written guarantee that the plant would be up and running in a year. When the deadline arrived that August, however, the plant was still comatose. With no money coming in, McCarthy was unable to pay his quarterly interest to Met Life that September. Far worse, he told Equitable executives he would need to delay his next two debt payments to them as well.
With alarm bells ringing at Equitable’s headquarters, McCarthy stunned the company by announcing he had found a new oil field at New Ulm, 80 miles west of Houston. It should have come as welcome news, but developing the field took money McCarthy didn’t have. Lender and borrower arrived at a face-off: Equitable insisted it wouldn’t lend McCarthy another dime until he paid what he owed – and McCarthy was already giving Equitable half his income. McCarthy insisted he couldn’t pay unless allowed to develop New Ulm. In the meantime, he began paying many of the Shamrock’s entertainment acts with shares in the new field.
Next month, McCarthy seeks relief in bottles of bourbon from his mounting financial pressures.
The son of a peanut farmer and oil pipeline worker, I began my meteoric rise in Texas state politics following graduation from UT, and early on was described by LBJ as “The Future.” My rapid political ascension was likened to that of presidents Jefferson, Jackson, Roosevelt and Kennedy, but it all came crashing down when I was unjustly associated with a famous Houston scandal. Who am I?
If you would like to participate in this month’s quiz, e-mail your answer to firstname.lastname@example.org by noon, September 15.
The winner, who will be chosen randomly from all correct answers, will receive a $50 restaurant gift card, courtesy of the ProTechnics Division of Core Laboratories.”
ANSWER TO MAY'S QUIZ
The member of the House of Representatives who led Republican initiatives to reduce energy prices for American families and small businesses in 2009, thus increasing his exposure and laying the foundation for a major political promotion several years “hence,” was Mike Pence.
CONGRATULATIONS TO MAY’S WINNER
Siddhartha Sen at IHS Markit