South Texas wildcatter leads uncertain life

5/4/2013 9:00 AM
By Associated Press

BATESVILLE, Texas (AP) — Harvey Howell trails carefully behind David Holdsworth, who details the ways his vast ranch can stick the unsuspecting.

Holdsworth lists a number of cactuses and twisting brush. A tall wooden stake stands in the tangle, looking out of place but marking a potential oil well.

"We're going to get something this next time, aren't we?" Holdsworth asks, touching the stake as if for luck.

His land is hobbled by drought but on this Saturday in early March, spring emerges anyway and Holdsworth's Tortuga Ranch reveals a stark beauty.

Early settlers in Zavala County told tales of lost and buried treasure, but today's riches lie thousands of feet below ground. Holdsworth and his family own miles of mesquite — more than 14,000 acres — but he wants oil. So does Howell, a San Antonio geologist and wildcatter who hunts hydrocarbons in places no one else has found them or in depleted fields where others think oil is already gone.

Howell is coming off a recent dry hole in Frio County. And not far from this stake on Holdsworth's property sits a $600,000 wildcat well that isn't making money. It's producing just five barrels of oil per day and 50 barrels of briny water, which costs hundreds of dollars daily to dispose of.

Trying to fix the well will cost Howell and his investors $77,000 this month.

It might not work.

Marginal wells are financially prickly. It's easy to drop more good money down a bad well.

And Howell must start drilling new wells quickly or the mineral lease that lets him explore the historic ranch will expire. Howell needs a success, and he must stake his next spot in the brush carefully or get stung.

"You have to really want to be here," Howell tells the San Antonio Express-News (http://bit.ly/130YWOg) as he plucks an inch-long thorn from his cowboy boot.

Holdsworth's then 8-year-old grandfather arrived in Zavala County in the spring of 1882, a wet year that produced a sea of wildflowers.

It was a time before barbed wire fences enclosed local ranches, when cleansing wildfires kept the countryside a savannah that ran with perennial streams. Thick mesquite and thorny brush did not yet blanket the landscape.

But Holdsworth's family soon struggled with drought and poverty in what one of his ancestors came to call "this dedgum country." For a while, they lived in a tent.

Cattle ranching eventually lifted the family's fortunes. Oil and gas production starting in the 1960s helped, too, although it was never a bonanza.

Holdsworth's property includes the Indio Field, drilled while he was growing up. But those wells dried up in the 1980s. A different oil boom came and went in the '90s in South Texas, bypassing Tortuga Ranch.

In the oil field, it's easy to be so close but so far away.

Not far to the southwest, a map of oil and gas wells in Zavala and Dimmit counties reveals a slew of riches — deep, horizontal wells slashing under the landscape through formations such as the Austin Chalk, Buda Limestone and Eagle Ford Shale, now one of the most profitable oil fields in the country.

But the oil and gas history of Tortuga Ranch and others nearby look spottier, with successful wells mostly surrounded by a series of dry holes.

Howell has poked around here for a decade trying to solve the riddle of its underground volcanoes, called serpentine plugs, and a web of faults that can trap and hold oil but also make it maddening to find what's still there.

One side of a fault is like hitting the lottery; a few yards away yields heartbreak.

The first well produced only water.

But the second paid, producing about 25,000 barrels of oil.

A quarter of that oil went to Holdsworth when he really needed it. He didn't have to work his land so hard or truck cattle himself to the Midwest. Holdsworth could spend more time with his new bride Tamara, whom he met at a dance in Uvalde while she was working on a master's degree in range ecology and fire behavior.

"I didn't have to run so many cattle. I used to have a vicious cycle," Holdsworth says. "When Harvey drilled that, it really helped Tamara and me."

When the oil first came in, Holdsworth rubbed it on his arms and face in delight. He got sunburned.

But after that, Howell and Holdsworth's luck ran dry.

"I've been eroding his confidence ever since," Holdsworth says.

After the men walk to the No. 3 well, which produced some natural gas but no money, Holdsworth turns a wheel and releases the 215 pounds of pressure. The methane gas smells like a kitchen stove for a moment and turns the air wavy. A hollow whistle emerges from the Earth, but soon stops.

Holdsworth calls it the "sad-story well."

When the No. 4 and No. 5 wells also turned into sad stories, "that's about the time everyone got disgusted and had had enough," Howell says.

The investors lost interest. His original lease expired.

Then the Eagle Ford Shale boom began.

The formation starts around 6,000 feet down in Zavala County, the northern edge of the giant oil and gas field.

National and multinational companies dominate the South Texas oil patch these days, but they don't lease everything. There are always pockets for smaller, longtime wildcatters like Howell to make deals.

Nearly three years ago, Holdsworth leased the rights to drill the Eagle Ford on his property to Oklahoma-based Chesapeake Energy Corp. Holdsworth received a large bonus payment for the right to drill, and an Eagle Ford well on the ranch last year made more than 46,000 barrels of oil, a quarter of that going to Holdsworth.

But large landowners can use the weight of their acreage as a negotiating tool.

Holdsworth's mineral lease reserved the shallow drilling rights so that Howell could return and try his luck again in rock formations that lie above the shale, such as the San Miguel and Olmos sandstones.

He bets that Howell will be the operator who sticks around and provides a longer stream of income to help keep his legacy ranch intact for the future.

Deeply buried oil and gas move higher over time, pushing their way to the surface.

By March 19, a workover rig, which is used to restore a well's production, moves in to try to fix the marginal well, bringing with it an evening cool front. The change in weather has so many rattlesnakes moving across the ranch roads that Holdsworth loses count.

The next day crew simply needs to lower more pipe into the well, thread it to the lost strand and pull it all back up. But they don't have enough pipe left at the surface to reach down 580 feet.

Jim Wilson, the company man who monitors the site, starts making calls. Everyone wants to sell more pipe than he needs, though, so it takes six tries to get the needed amount delivered.

Late on March 21, a crew pumped cement down and around the well to seal off the lower portion. Now the rig needs to drill back through some of the cement, but it's still "green" and hasn't set.

At 12:30 p.m. the next day, Wilson calls Ryan Broglie, an engineer in San Antonio working on the project, to decide whether they should wait a few hours or give the cement the weekend to harden.

"It's up to you," Sanchez tells Wilson. "We're seven-day freaks. We don't care."

They shut down for the weekend. After 32 days in the field, they have a weekend off. It's payday and Sonny Sanchez, a tool pusher or drilling crew leader, calculates that in two weeks the driller earned $4,200, the derrick man $4,000 and the floor hand $3,800, minus taxes.

Everyone wants to leave Tortuga Ranch but Sanchez. In 1999, his oldest son, Robert, was killed in an oil field accident.

Sanchez has lost more people in recent years: another son and a grandson, and his younger brother, who died last year of a heart attack. He likes working. Working keeps him from thinking.

Drilling rigs run 24 hours a day, seven days a week. But workover rigs are daylight operations, sunup to sundown.

Holdsworth's mineral lease restricts drilling during deer hunting season. There are fines for litter. Fines for driving faster than 20 mph. Fines for not drilling after all. Essentially, 40-plus pages of fines and rules.

Holdsworth has watched oil field workers tromp across his land since he was a child. He roughnecked in the early '80s. He knows what can go wrong. He calls his lease "nasty."

"I knew he was a good fellow," Holdsworth says of Howell. "If I made him live up to that lease, he wouldn't be able to do anything."

"It's a toxic lease. It's awful," Howell says. "I had to work on a handshake. I said, 'All right, I'll trust you.' We're still trusting each other. He still has an awful lease."

Howell's investors have to trust him, too.

Howell's stepfather, C.R. "Bob" Daubert, is one of them. He met Howell's mother on a ski trip, and they married in 1979.

Daubert, also a geologist, calls the marginal well "a real problem child."

"It's been terrible. When it first came in, we thought we had the tiger by the tail. Harvey brought a sample of the oil in a jar to the house. We started drinking wine in the middle of the afternoon."

Now, Howell's position is as thorny as the countryside.

By 3 p.m. the next Wednesday, the rig is folded up like a giant umbrella and parked on a corner of the site. Trucks load up and drive away. Sanchez helps secure the blowout preventer to a trailer.

In a few days, the well gradually starts producing more oil and less water, a few barrels at a time. First five barrels. Then eight. Then 11.

The recompletion seems to have worked, although it's early.

The industry calls oil and gas fields "plays," and Holdsworth calls his ranch "Harvey's playground."

But Tortuga Ranch needs another well, and a good one. Or, Holdsworth worries, this game is over. He thinks Howell will be snakebit, his investors again disgusted with the complex geology beneath the ranch.

"We've got one dance," Holdsworth says. "That's all we've got out of this."

More thorny brush has been cleared.

A drilling rig arrives in three days, and Holdsworth grows anxious.

___

Information from: San Antonio Express-News, http://www.mysanantonio.com


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