Holly Energy 1977-1981
I was recruited to work in Corpus Christi in one of the 7 district offices of Holly Energy, which was a small public company based out of Dallas whose main asset was a refinery in New Mexico that was generating a lot of cash flow. The owner and President was very aggressive in spending that money on oil/gas exploration. They offered a 50% salary increase, a car allowance and stock options. But the biggest carrot they offered was “you make us rich and we will make you rich”.
The president and chairman of the board flew, in their private jet, to all of the district offices twice a month and expected to see new prospects. We presented them pencil contoured maps and logs and they took or rejected the deals on the conference room table. And the definition of a prospect was a drillable deal ready to drill. We had no partners in the deals—they did everything 100% Holly Energy. Every 3 months all the districts met in Dallas and the results of each district’s quarterly results were shown on bar charts displaying wells drilled, gas produced, oil produced and money generated. If you did not keep your numbers up, you were out and replaced by someone who could.
Needless to say, this was a high pressure job and was considerably different from Chevron which had seven layers of management to approve a prospect and, of course, I never met the Chairman of Chevron.
Well, to survive under this scenario took creativity and confidence. Our district manager had each geologist determine the trend we wanted to work and then he sent landmen to find open acreage that was available in each trend area. So we only worked on the geology of areas we knew had open and available acreage and we mainly ‘corner shot’ existing fields. We did not have the time to do field studies or regional exploration.
This district office was very successful. We drilled a lot of wells–mostly development. We generated smaller sized prospects and we usually found less oil and gas than we thought we would. Small prospects find smaller reserves. There was a lot of effort, time and money spent –but we had to keep up the frantic pace to keep the numbers up.
But one year our number of wells drilled was up, but our gas and oil reserves were down towards the end of the year. But, our district manager had gotten approval to drill two higher potential and riskier prospects and one of them actually was a discovery in the last quarter of the year. This one large potential prospect discovery put us way over our quotas and we all expected very large bonuses based on the original verbal formula that we were working under. But management changed the rules in midstream—they decided they did not want to give that much money to the employees for fear that they would quit. So the lesson learned here was to get your agreements in writing.