W. M. Hudson Interview - W. M. Hudson Interview [part 5 of 6]

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  • PIONEERS IN TEXAS OIL TOPIC: Beaumont, Sour Lake, Batson's Prairie NAME: W. M. Hudson INTERVIEWER: W. M. Hudson, Jr. PLAGE: TAPE NO. 81 DATE: 9/18/52__RESTRICTIONS: None Hudson - The present development seems to be concentrated more or less around Cacalidao, which is north of Cadero, also north of Pantico.
  • And the Wiegand brothers have a contract to drill a hundred wells in that section by, with the Mexican government.
  • And Brownie Byrd had also a contract to drill ten wells in the same section. And I've heard that Bill Smith and Leo Land had a contract to drill five hundred wells down in these other oil fields south of Tampico and Vera Cruz.
  • Whether that's so or not, I don't know. But they brought in a long lot of big string of machinery.
  • Wilson - Did you do any drilling yourself in Mexico?
  • H.- No.
  • W.- What forms of oil industry did you take an interest in?
  • H.- Well, by having been there, and been originators of the oil business in that immediate vicinity, knew all the land owners adjoining, and as a consequence had little trouble in getting leases from them, at fifty centavos a hectado which was two acres and a half.
  • And also helped some of the major companies get terminals along the river front, camp, tank sites and one thing and another.
  • I don't know whether I can tell --- since the expropriation of the oil business in 1938, don't leave foreigners any chance to get in.
  • The only way foreigners can have anything to do with
  • the oil business there is to get a contract, drilling contract from the Mexican government's oil department.
  • And the contract is in such a, such a condition that I can't see how anybody would be interested in drilling a well.
  • They make locations and half the expense of making the location and geophysical work, in making these locations is to be borne by the contractor.
  • All expense of drilling the well is to be borne by him.
  • If the well is a producer, he has a right to use all the oil for a period of ten years.
  • But with a obligation of selling this oil to the petroleum department, which agreed to pay fifty cents a barrel for it, as long as they're getting two dollars and three dollars a barrel.
  • Out of that fifty cents a barrel, the contractor has to pay the production tax, and a few other little taxes, occupation tax and such, leaves him about thirty seven cents a barrel.
  • He has the use of this oil for ten years. At the end of ten years it reverts to the government and he has no more interest in it. That's for a well drilled around these old fields,
  • There is, I understand, a more favorable contract for wildcat wells, but I've never been able to get hold of that contract to read it, but I have read the other one.
  • As a consequence of the expropriation, all wells that were in production at that time on leased property had the obligation to pay the royalty to the land owner.
  • But after the date of that expropriation, the government claimed the sub-soil rights to all minerals which oil is included.
  • So it leaves the land owner with the privilege of allowing the government to work on
  • his land and mess it up with oil without any indemnity or anything to matter.
  • In 1938 there seemed to be friction between the government and the major companies, operating companies.
  • And they couldn't get to any agreement one way or the other, one side or the other wouldn't concede to smooth things up, so with one stroke of the pen the president expropriated the rights of all these companies and everything they had including the buildings, and tanks and machinery, and oil. That's all --
  • W.- Well, besides the American companies, there were foreign companies there, too.
  • H.- Oh, yes, the English companies, the Iena Oil Company and the Corona are English interest companies.
  • They were expropriated, too. And there were German companies, all of them almost all of them, except the Mexican Gulf Oil Company were not expropriated for apparently they were not in friction with the government at that time, and this, up to this year, the Mexican Gulf sold out its interest in the oil business and turned it over to the Mexican government.
  • W.- Well, did Americans own stock in the Mexican Gulf?
  • H.- Oh, yes. It was same, it's part of the Gulf Oil Company up here.
  • W.- Were you in Tampico at the time of the expropriation?
  • H.- No, no. I was in State of Jalisco.
  • W.- When did you leave Tampico?
  • H.- In July 6, 1925.
  • W.- Why did you leave?
  • H.- Because the expropriation of the Santa Fe Ranch for
  • agrarian purposes by the government.
  • W.- What were those purposes, agrarian purposes?
  • H.- To take my land away from me and give it to them.
  • W.- Well, we don't know much about the agraristas up here. Tell us a little bit about them.
  • H.- Well, the government takes away a man's land, has a pretty good body of land, and as a consequence it don't cost him anything. And they usually tried to get it with a crop on it, already ready to gather and take it over.
  • But when there's any additions made to the first decree of expropriating land, and one of the later decrees is, was, that the expropriation with the land with what was on it, which included irrigation ditches and pump stations, and even some of the agrarians figured out that it meant the livestock that was on it.
  • They even took cattle and horses and everything they could find on a piece of land that was expropriated by the government.
  • W.- Well, how do the agrarians operate?
  • H.- Well, they suppose to have had in the better sections of land is all classified. But in the better sections of land, it's supposed to have ten acres each to make a living on.
  • About all he's got to start with is ten acres of brush and a machete to make a living. And he can't live long without something to eat and not long enough to clear off the land and raise a crop on it.
  • So as a consequence, some land that's already in cultivation, they expropriate and make what they call a congregation which includes maybe two hundred families. All have an equal share in this property, which is more or less considered as a
  • corporated, cooperative, corporation. So they all work together they all have a claim on it.
  • As a consequence some, some people are naturally good workers and always will be, and others have always been lazy and if they have a part in it, doesn't make any particular difference to them whether they work or whether they don't; but still they have their part in it.
  • So as a consequence, a few of the best workers do most of the work, and the balance of them live.
  • Since the agrarian problem was put up in that way, Mexico doesn't raise enough grain to feed their own farmers. They have to import grain from foreign countries, so they can all have something to eat.
  • W.- Well, the agrarians were, are they in a kind of a voluntary community that decides to pool interest or rather work and take over some land; working through the government and ---
  • H.- The government takes a expropriation of land and gives them a definite title to it.
  • W.- Who takes the initiative, a band of agrarians or the government, who starts things rolling?
  • H.- The government sends out the engineers and they, the agrarians make a solicitude for so many families for so much land. Then the government sends an engineer and measures out the land and finally the government gives a title to the property, while in place of giving each one his individual title, to his individual property, and putting him on his own property, they give it as a community. They give the bunch as a community, each one has his rights to so much land in it.
  • W.- That's a form of Communism then, isn't it?
  • H.- Yes, similar.
  • W.- Well, it sounds something like a collective farm in Russia.
  • H.- Well, it is collective.
  • W.- Well when did the agrarian movement get started?
  • H.- It started with President Carranza, who was General Carranza before he was president, called Premier Jefe - the first jefe.
  • W.- The Carrancista Revolution was in 1911, wasn't it?
  • H.- 1911, yes. But Carranza put that law into effect in about 1915. He got out some decrees to put that law into effect about 1915.
  • And they didn't, there wasn't any of those laws put into effect until sometimes later in, in General Obreggon's term of office.
  • W.- Carrancista's law was a kind of enabling law then, was it?
  • H.- Yes, it was done to attract more soldiers into the army, agreed to give them something. Well, it was done with an idea of protecting the poorer classes which were in rather bad hands from the big haciendados and ranch owners, had them more or less as slaves.
  • But many of them since they've gone into the agrarian problem, have decided that they'd rather be, rather have been a laborer under the old system, than to be agrarians now. They cannot dispose of the land, it's not theirs to be sold. They can't rent it, they have to work it.
  • W.- Well, what happens if the agrarian community becomes over-populated. Do the people began to have less and less and starve?
  • H.- Well, no. The government several times has had an institution, a banking institution, to loan the money to tide them over of making crops, but since the start of it they've never been
  • able to collect it all back.
  • And as a consequence, once in a while the government cuts off all the systems in certain parts where they don't get anything back on it, and it leaves them in pretty bad shape. Nobody to assist them.
  • W.- Were other oil fields affected by the agrarian expropriation?
  • H.- No, oil fields not affected by the agrarian expropriation, that's affected by the government's expropriation of the subsoil rights.
  • W.- Well, I know that, but your Santa Fe was expropriated, at least part of it was, where you had been producing wells.
  • H.- Yes, any well on it, that's a government property, it's not given to the agrarians. They have no more right to the subsoil than any other owner might have. An expropriation of the sub-soil takes away from everybody, it don't leave the agrarians anything.
  • In 1916 I came from Tampico up to Wallaceville, on the mouth of the Trinity River, and made a location to drill a well about five miles north of Wallaceville, on the Liberty road. And drilled a well about, a little better than 2,000 feet, 2,024 to be exact. Didn't have any luck.
  • The money that was being put up for this drill, drilling proposition was supposed to have been also put up to drill a well at Flatonia.
  • W.- Who was putting it up?
  • H.- I sold stock in a company to Mr. Thomas for the money. Drilled this well here and drilled a well at Flatonia. After this well was a failure, went way down on the stock and didn't take it up. So there wasn't enough money to drill a well at Flatonia. I understand since that there's a well drilled on
  • the same land that I had under lease where they're drilling that well.
  • W.- Well, there's a Muldoon field which is very close to Flatonia. You know anything about that area?
  • H.- Out at the old Hudson farm, on the Colony road, from Flatonia about five miles, when I drilled a well at Wallaceville, I went out to see that property, because when I was a kid, we drilled a well or dropped a well for water, and got out some kind of a rock out of it, and put it in my coat pocket.
  • Very strong smelling rock. Didn't know what it smelled like then, but I do now. Put it in my coat pocket while I was working, and when I went home at noon, I thought about my rock and got it out to look at it. A very heavy rock, but it wasn't in my pocket, it had eaten the lining of my coat out, and turned a black coat red.
  • Well, gave me the idea that there was gas there, because on the other of the road the well had been drilled up there about two hundred feet and all of the water that came out of this well, all the connections around this well, of copper, had turned black, oxidized, and then the water it was, smelt like rotten eggs.
  • All the cattle and horses liked the water, but human beings couldn't hardly drink it.
  • And on another place on this same land that belonged to my father, there was a German that had drilled a well and had it down to 157 feet. One day, afternoon, he had lit his pipe, he had a big red beard, lit his pipe and went, went out to the well, and struck a match in the well curb. Lit, to light his pipe but he lit the well. It singed all of his whiskers off.
  • The well was drilled down some fifty feet farther, and practically the water wouldn't settle on account of the crystal sulfur that was floating in the
  • water.
  • W.- What was the rock that you put in your pocket?
  • H.- I couldn't tell you. But it was heavy, as it might have been lead, but probably it ---
  • W.- It disintegrated in your pocket.
  • H.- Well, it ate the cloth up, went through the pocket, and turned the black cloth red.
  • W.- You say you didn't know what the rock was but you know now what it smelled like. What'd it smell like?
  • H.- Smelled like sulfur.
  • W.- Did you find any more of that rock out there?
  • H.- No, I went back after I was grown and tried the thing over in the same place and got down about the same level but I didn't find any of that rock. But I did find that smell which was about 14 feet deep under the surface.
  • W.- Didn't you ride all over that area on horseback in 1916, prospecting?
  • H.- No, no. I been all over it on foot a hundred times because I lived there you know when I was a kid.
  • W.- You took up some leases, didn't you?
  • H.- Oh, yes. I took up a lease from Old Frank Howell's place, which is our old place, and on the Killian Bruner place which is our place and some adjoining property which was Will Bruner's place.
  • Across this Will Bruner's place there was oak timber there, there was a stretch of country that all the trees along what apparently is a crack, or has been a slip in the earth's surface caused a difference in the level. All the trees, oak
  • trees are very close to that crack are leaned over to one side showing that the root, roots had been loosened up by this movement of the earth.
  • W.- It was a recent movement then apparently, wasn't it?
  • H.- Yes, yes. It must have been a movement some time after these seeds grown up anyhow. And I talked once to a geologist about it and he said it looked like it might be the formation of a salt dome but he didn't know.
  • This well that I drilled at Wallaceville, one day my derrick man was sick and I had to take the derrick. Pulling the tubing and drill pipe, had one short stand.
  • Had to unlatch the elevator and move it back very carefully as it barely reached the fingerboards. And as I unlatched the elevator, before I had time to move it back, the driller running the engine throwed it in reverse, and clamped the pipe with the latch off.
  • Slung the pipe across the derrick, the foot of the pipe across the derrick, and I got out on the outside of the derrick, with both feet on the girt, and both hands holding tight to the bracers, and after three or four swings across the derrick floor, the foot of the pipe hit the rotary table which I knew it had to and jarred it loose of the elevator.
  • And as it came over and hit the side of the derrick where I was, it hit with such force, that it knocked both feet and both hands loose from the derrick and a man can think quick in a short time like that; I had time to look back and see the two six inch suction pipes in the slush pit about a yard apart and thought that if I fell between those two pipes, might be worth fishing out.
  • If I hit one of them, I wouldn't be. But that wasn't all I thought
  • about. While I was thinking, I was acting. I stuck one leg inside the first girt that I came to down below, and hung with my head downhill and climbed back up. Stuck my head inside the derrick, and the motorman was running, running his engine forwards and backwards, and forwards and backwards, looking where there was a piece of cotton.
  • I hollered at him and told him, "If you don't know which way you want to run I'd shut it down until you find out." I said, "If you don't want to knock me out of here, I'm too much a cat for you to do that, you'll have to try something else."
  • Old man Clay was the driller.
  • W.- After you had drilled the dry hole at Wallaceville, and after you had taken up the leases in Fayette County, that you didn't follow up, did you quit the oil business in the United States altogether?
  • H.- Yes, and returned to Tampico, Mexico. And some time later, back in Houston again, in the Gulf Oil Company's office, Mr. Lasro was at that time was learning that I was on my way to Oklahoma, asked me to look up something for the Gulf Company, and something big.
  • Well, the place I used to live on before I left the Osage Indian Country belonged to a big Indian by the name of Yellow Horse. And there was a railroad that was being built through when I left in 1901, there was at that present time, there was a town site made there called Fairfax.
  • And at that time my brother, J. L., was managing a bank ---
  • W.- In 1916.
  • H.- Something like that. Somewhere close to that date, I can't be sure. Well, anyway, on this trip they had a roundup over at
  • Harmony Post.
  • Jess asked me one day, "Would you like to go over at Harmony Post, they're going to have a roundup over there today and a cattle-roping contest." I told him yes, it'd be fine, I'd like to go.
  • And on the way over in the timber, the post-oak timber, through what we used to run cattle on and called the Iron's Pasture, I saw a derrick, an oil derrick. Why hello, I said, they got a oil field here. He said, "Yes, there's nine producing wells and two gassers, and they're drilling another one."
  • Well when we got into the thick of them, where they were drilling on this well, we left our car something like two hundred yards and went over to the rig. It was then beginning to make gas. Later, I asked Jess on the road, if they'd sell that lease. He said, "Yes, but who'd want it? It's forty miles from a pipeline. Well, besides they want a million dollars for it."
  • Well, how big is the lease. He said, "Four thousand eight hundred acres." Well, I said that I tell you what you do. I said, you ask them for an option, a thirty days option, but not for a million dollars, for three million.
  • Well Jess said, "What's the matter with you, you crazy?" I said no, not so much as you might calculate, because what business I do with the company will be on a commission basis. And if I'm only selling them something that cost them a million dollars, I couldn't reasonably put on more than a hundred thousand for myself. But I could sell it to them quicker for three million dollars and probably put on a half million for myself.
  • Do you know the owners of this? "Why yes," he says, "They live over at Tulsa here not far away." And I said, "Will you get an option on it?" And he said, "Yes,
  • I can get an option on it alright." Well, who are the owners? "Well, I don't remember who," he said, "except one of them was Sinclair and the other one was a doctor that lived in Tulsa."
  • Well, I had to return to Mexico and with the expectation of him getting this option. Time passed and I heard nothing from him, and I asked for, what had been done about it, and repeatedly asked and got no satisfactory answer, and really don't think he even went to Tulsa to see about it.
  • But in a short time after, probably a period of six months after I had seen these wells, the Gulf bought a one-half interest in this 4,800 acre lease and paid twelve million dollars for it. So that's one chance that just slipped off.
  • Along about 1920 and 1923, my partner, Mr. Thomas, and I had acquired quite a lot of leases and land properties.
  • W.- In the Tampico area?
  • H.- In the Tampico area. And Mr. Thomas decided it would be a good idea to go over to London and have a talk with the Corona Oil Company here in Mexico which is the Crown here, and subsidiary or part owner of the English government.
  • While he was over, I presented all of our documents to the local manager in Tampico who had already examined all the properties. And at the same time we were drilling a well at the Devil's Elbow on the Pantico River.
  • One day I got word that the well had come in and was going wild. So the manager of the Freeport loaned me a fast launch and a diving suit and rushed me up to the well.
  • The next morning when I got to the well all the drillers and everybody was there, had a sump probably with a 3 or 4 thousand
  • barrels of oil in it, that they'd picked up, the well was closed in, the boys all washed up and already finished up. And it's estimated at a fifty thousand barrel well.
  • So, this wasn't bad news at all to wire to Mr. Thomas who was in London trying to make a deal with Corona. Well, they had concerted an arrangement whereby the Corona would put up eleven million dollars to exploit our properties and give us a little cash money on the side to start with as our own individual cash, a million dollars.
  • There was, the Corona sent a man back from London with Mr. Thomas to examine the properties. But about that time the radical laws and decrees began to float pretty freely in the air in Mexico, and the deal didn't go through.
  • Well, we put in a loading rack, docks on the Pantico River, and I flowed the well, it made five, four thousand seven hundred to five thousand barrels a day for quite a while. Along about this time, the agrarians expropriated some of the Santa Fe Ranch which was our original purchase.
  • W.- We've already talked about the agrarian before.
  • H.- Yes. But, when they expropriated this property I wanted to get farther away. So I abandoned Tampico and thought I'd go so far in the West and so high in the mountains that I wouldn't hear the agrarians mentioned.
  • And started to work on mines, which I knew, didn't know anymore about except that I knew that most of them was a hole in the ground. Well ---
  • W.- That's what you knew about oil wells when you started with them, too, wasn't it?
  • H.- That's what I knew about oil wells also. Well, after working about say, sixteen or eighteen years, I found out that these
  • holes in the ground, called mines, was a good place to put something in, but a very hard place to get something out of.
  • Anyway we probably would a did, done better if we had enough money to have carried out the plans that were made before we started developing our mines; but money all was so scarce, we couldn't put in machinery and do the development work necessary to make a real mine out of it.
  • Let me go back to the time that we worked these wells at the Devil's Elbow. While we were working those wells and I was flowing it, one morning I heard a terrific explosion and saw the tubing which was standing up in the derrick, about two hundred yards away, falling from one side of the derrick to the other.
  • Everybody in the field making tracks to get there to see what had happened. When I arrived, when I got within fifty yards of the derrick, I found a Mexican helper with one side, with a hole in one side of his head, and part of his brains showing.
  • A little farther on, another one badly wounded. And when I got to the well, I was informed that there was three men that went into the pit, to try to change the pressure off of the lower valve which was stuck on account of having nine hundred pounds pressure to the square inch.
  • And apparently they were trying to make a by-pass, to take the pressure off this lower valve. They had already put on another valve above, and they were trying to make a by-pass to put the pressure, to let the pressure out, so they could open the valve below.
  • W.- That was through a smaller pipe attached from the lower to the upper valve.
  • H.- Through a one inch, one-eighth inch pipe or less, a very
  • small pipe, just enough, a little gas pressure to equalize the pressure so as to take the pressure off the valve, so it could be opened.
  • W.- Just one little pipe.
  • H.- Yes.
  • W.- And that was their way of controlling the big pressures.
  • H.- Well, that's the way of taking the pressure off one valve, and relieving it, so that you put in this by-pass.
  • Well, seems like, one of the Mexican helpers took a wrench and caught hold of one, some nut, or some bolt, or clamp or something and anyway he made a slight move with the wrench and that caused the explosion on account of the high pressure and they were both seriously injured; at that time, they took the American driller out with a hole in his back the size of your fist and he died within a few minutes.
  • These two Mexican helpers were afterwards taken to Tampico and both of them came out of the hospital alright. This fellow that had his brains out, he came out alright.
  • W.- Was there a big concrete inplacement there?
  • H.- Well, it's what, what they call the pit, that's around, around the top of the well probably eight or ten feet deep so you can get in there and work around the top of the well inside. Big enough to work on all around pipe.
  • W.- Was that a new thing at that time?
  • H.- No, that's, that's customary