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The Sunday Times: Return of the wildcat oilmen

July 30, 2006

Special Report

Prospectors are scouring Africa and the US deserts in search of black gold.
By Tarquin Hall
“FOLKS call me Cactus on account of a friend of my dad’s,” said Charles E Schroeder III, as he emerged from a Texas steakhouse where he had devoured an enormous plate of prime rib for lunch.

“When I was born he took one look at me and said, ‘that boy don’t look like no baby! He looks like a cactus!’ So the nickname kind of stuck.” 
Cactus is the real deal: one of the last independent oil prospectors in northwest Texas — a genuine wildcatter. He sports a Stetson, ostrich-skin cowboy boots and drives around with a .308 rifle in the cab of his SUV (bumper sticker: “Don’t mess with Texas!”).

The 51-year-old is the embodiment of the fiercely independent spirit of the Lone Star State. A geologist and self-made man, he plays tennis and loves to visit Wimbledon, but still prides himself on being “basically a redneck kinda fella”.

We drive 20 miles outside his hometown of Abilene, leaving behind strip-mall America with its drive-though culture — a world that even former independent oilman George W Bush admits is addicted to gasoline.

Turning off the road, the SUV bumps across rocky ranch land where steers graze and rattlesnakes doze in the shade of wild oak. It’s here that Cactus is making his latest “play”. In the grand tradition of the American frontier, he is drilling a “wildcat” on virgin land that has never been explored for oil.

If he is lucky, he could be sitting on millions. But despite all the advances that have been made in exploration since the early American boomtown days, the wildcatting business is still fraught with risk.

Cactus has already drilled one “dry hole”. If he doesn’t make a strike on his second attempt, he will be $300,000 (£160,000) out of pocket.

“That’s wildcatting for you,” he grinned, with the glint of a gambler hoping for his next win. “You can do all the geology and science you like, but it’s only when you drill down deep enough that you get a definitive answer. Sometimes all you bring up is mud and you’ve got to just walk away.”

The oil busts of the 1980s and 1990s put most of America’s wildcatters out of business. Cactus only survived because he didn’t have a family to support and he could live on beans. Today, with oil selling at more than $70 a barrel and America desperate for secure supplies, wildcatting is suddenly looking like an attractive prospect again.

“Nowadays this part of Texas is a wildcatter’s paradise,” he said, standing next to his rig, a monster contraption with a 120ft tower, which costs him about $8,000 a day to operate.

“All the majors, like the Exxons, they’re long gone. They’re off looking for the real big plays. So that leaves space for the little guy.”

Cactus swaps his Stetson for a hard hat and leads me up on to the rig. His core team of hands are hard at work. The drilling is done by a crew of tattooed, tobacco-chewing roughnecks who, according to their boss, are dropouts and ex-cons.

“Last week I had to fire a bunch of their asses,” shouted Cactus over the deafening noise of the drill. “We went and run some drug tests and they all came up positive.”

It’s typical of the kind of daily problems he faces. The fundamentals of wildcatting remain the same: it’s still about wheeling and dealing, tough negotiating and, above all, strong nerves. “People who get depressed or overly excited shouldn’t be in this business,” said Cactus. “Like I always say: you’ve got to stay on an even keel to make the deal.”

The biggest strike of Cactus’s career brought in 4m barrels. At today’s prices a find like that would gross more than $250m. But by oil-industry standards it’s small beer. America consumes five times that every day. And although one of the biggest fields in the world, at Sacroc, is only 80 miles to the west of Abilene, Cactus recognises that the odds of making a really significant find in the area are slim.

If he’s going to realise the dream of all independent oil men and hit that one gigantic gusher, he is going to have to search further afield. “I gotta put a nice big piece of cheese on the table,” is how he puts it.

Cactus believes there is still a lot more oil right under America’s nose. Even in Texas there could be big reserves caught in what he calls “strat traps”, geological features that don’t show up during seismic testing.

And he is not alone. Independents across the country are getting back into the exploration business. Rigs and pumps that were mothballed in the 1990s are being dusted off and put back to work. In 2005, 1,384 wildcats were drilled in the US. Independents are also revisiting fields long-since abandoned by the big oil companies where, using new extraction techniques, they are making old wells profitable again.

“Right now we can only extract 40% of the reserves out of the ground,” said Cactus. “Pretty soon we should be able to get it up to 60%. That’s going to mean a whole lot more oil.”

The red Texan sun is low in the sky as the conversation turns, not for the first time, to the Middle East. There is growing anxiety that America, which relies on imports for 60% of its oil, is increasingly vulnerable. Even the hands talk about tension brewing in Iran.

“All they’ve gotta do is knock out the Strait of Hormuz and we’re in a whole lotta trouble,” said one.

Cactus, too, is filled with apprehension. He believes Osama bin Laden’s main objective is to take over Saudi Arabia and cut off US oil supplies. Since September 11 he has become unmistakably patriotic about his role as an oil man.

“I believe George (President Bush, with whom he used to go jogging) hit the nail on the head. We need to stop being so dependent on all these unstable and downright hostile parts of the world. What we need is oil prices to stay high so we can carry on developing production here in America.”

But he is critical of the oil majors for not doing any new exploration in the US, despite pressure from Congress.

“They don’t like taking the risk. They leave it to the wildcatters to get out there and find the oil. Well, right now America needs us more than ever.”

He points out that the east coast has never been drilled for oil, nor has most of offshore California. Much of Alaska is off limits as well.

“The American people are happy for oil companies to go drilling off the coasts of other countries but not our own,” said Cactus. “I call that hypocritical. And I’ve gotta tell you: when prices hit $300 a barrel the public’s going to change their tune. They’re going to be screaming, ‘Go get that oil! Go drill wherever you like!’” I take my leave of Cactus, promising to return later to see how he has progressed with his wildcat, and drive the 125 miles to Houston, the so-called oil capital of the world. The big oil companies are all headquartered here in a skyline of glistening glass and steel towers.

In the Houston Club, the talk is all about the race to find new oil and gas in the world’s unexplored regions — a race that is getting tougher not only due to the politics of Venezuelan president Hugo Chavez and Middle East instability, but the growing demand from China and India.

“Wherever I go, I run into Chinese and Indian exploration and negotiating teams,” said geologist Gabor Tari. “So far they don’t have the expertise when it comes to deep-sea exploration, so they have to piggyback off other people’s deals. But they’re catching up fast.”

Given the extraordinary levels of investment required in searching for oil in the less accessible parts of the world, you might think there was no room for independents. But one wily American wildcatter is out there competing with the big boys.

Gene Van Dyke, a 79-year-old geologist, is probably the oldest wildcatter left in the business. He began his career in his twenties by hitchhiking to Wichita Falls, Texas, and sniffing out prospects. In those days, when he came across some promising-looking land, he would talk the owner into leasing him the mineral rights and type up the contract on a portable typewriter. Then he’d head to Dallas to find an oil company interested in drilling.

“When I started out I was so broke I used to have to sleep in whorehouses,” winked Van Dyke, when we meet in his Houston office. He strikes me as the kind of man who would be more comfortable in rolled-up sleeves rather than his jacket and tie. “It was tough to be around all those pretty girls and have the urge but not the cash.”

Fortunately for Van Dyke, he prospered. After discovering two gas fields in Louisiana in the 1960s, he went into offshore drilling in the Gulf of Mexico. In the 1970s, he took this expertise to the North Sea where he went wildcatting off the coast of southern Holland.

Today, Van Dyke is an extremely wealthy man with a lifestyle straight out of the TV show Dallas. He lives in a sprawling mansion with 22 “johns”, or lavatories, and a bar that puts JR Ewing’s to shame.

His third wife is Swedish and looks at least 20 years his junior. And he has acres of stunning offices on the 12th floor of 3, Greenway Plaza, with commanding views over Houston. Not bad for a guy from Normal, Illinois. But it isn’t enough. Like Cactus Schroeder, Van Dyke still hopes to land the big one.

“I’ve spent my whole damn career trying to get ahead of the curve,” he said. “Now, at long last, I’m ahead of it. I’m swinging for the fence. Going for home runs.”

Van Dyke has got out in front through foresight. In anticipation of today’s oil rush, he has travelled the length and breadth of Africa “going after the big elephant”. While the big oil companies concentrated on Angola and Nigeria, he hunted elsewhere. In Gabon he met President Omar Bongo, who has held power since 1967. In Ghana, he found himself negotiating face-to-face with President John Agyekum Kufuor.

“I had this huge map of off-shore Ghana that I wanted to show Kufuor and it was so big I had to open it up on the floor,” said Van Dyke. “So the president got down off his throne, or whatever you call it, and went down on his hands and knees next to me. All his lieutenants thought this was horribly undignified. They tried to get him up, but he was having a good time.”

Vanco, the company Van Dyke founded, has 20m square miles of African offshore territory under lease, equivalent to 70% of the Gulf of Mexico’s deep-water fields. He believes the region could hold up to 10 billion barrels. So far, drilling off the coasts of Morocco and the Ivory Coast has been moderately successful. But Van Dyke, who brings in investors and spreads most of the risk, has big expectations for the waters off Madagascar, where he is due to start drilling next year. “Even if I hit only 1 billion barrels of oil, it’s going to make Vanco a very big company,” he said.

Van Dyke is also hunting in colder waters. In April, he partnered up with Nathaniel Rothschild to bid for a tender in the Black Sea off the coast of Ukraine. Together they saw off stiff competition from Shell, Exxon Mobil and other international competitors. In 2007 Vanco will undertake the first deep-water exploration in the Black Sea, the only virgin sedimentary basin left in the world.

The walls of Vanco’s conference room are plastered with seismic results from the territory, some 3.2m acres. The subterranean structures they reveal are comparable to those found in the Caspian Sea, where the Russians control some of the largest fields on the planet. Van Dyke points to gigantic “gas vents” clearly visible in the rock formations, the telltale sign of vast deposits.

“The technology to drill at the depth required has only recently become available,” he said, showing me a photo of the semi-submersible rig that will drill at depths of more than 300 meters. “I think we could be looking at several major fields.”

Given the Russian gas stranglehold on Ukraine, Kiev is just a little anxious to know if his estimate is accurate. Yet despite the vast scale of the project, the basic rules of wildcatting still apply. Van Dyke won’t be able to give them definite answers until 2008.

“I’m doing the same thing I’ve always done on a bigger scale,” he said. “But nowadays you’ve got to be fast on your feet. Especially with the Indians and Chinese out there.”

Van Dyke is critical of the oil majors, which he said aren’t doing enough exploration. He points out that in 2005, Exxon Mobil spent more buying back its own shares than it did on exploration, research and development. “The majors are after big profits whereas the Asians just want the product,” he said. “Right now, the Indians and the Chinese are building refineries, getting into wildcatting, doing deals everywhere you go.”

I ask him if there is a crisis looming; if, before long, the West is going to find itself struggling for oil supplies. “Let me put it this way,” he said. “If the Chinese achieve the same standard of living as we enjoy in America, they’ll need the equivalent of all the oil used in the rest of the world today.”

Van Dyke sees no alternative but for the West to start moving away from a hydrocarbon-based economy. But in the meantime, he believes there is a lot of money to be made in tar sands, from which oil can be extracted.

“The Canadians have more than one-and-a-half trillion barrels of tar sands and the Venezuelans about the same. We’re going to be getting into them in a big way.” “It doesn’t sound like you are planning to retire,” I venture.

“Retire? Why would I retire? I don’t hunt or fish or play golf. I’ve always worked. Besides, I’m about to make the strike of my life.” Back outside Abilene, Cactus has struck oil at 4,800 ft and estimates the field should hold 1m barrels. Around the rig, the sweet smell of crude, so unlike the harsh reek of petrol, hangs in the air. Cactus shows me a sample, dipping his finger into the thick, black liquid. “Not to brag, but that’s the best-quality oil you’re ever likely to find,” he said proudly. He drove me back to Abilene, passing dozens of SUVs, pick-up trucks and Humvees, which average just 10 miles per gallon. The FM station he is tuned to carries a call-in show with the public complaining about oil prices. Americans, it seems, still believe in their God-given right to cheap gasoline.

“Most people in this country don’t understand that there’s no easy oil left and that it’s a finite resource,” said Cactus. When I comment that he’s hardly conserving petrol by driving a gas guzzler, he insists that in his business he needs a big, off-road vehicle. But he takes my point.

“A lot of people round here drive a four-wheel ’cause of the whole Texan image thing,” he said. “I know one guy who takes his to the car wash every time it gets a speck of dust on it. “Americans have a love affair with the car. But that can’t last. People are going to have to be more conservative.”

“And what about you wildcatters?” I ask as we pass a nodding donkey pump, a familiar feature on the Texan landscape. “Are you facing up to the future?” Cactus grins. “There’s still a lot of oil out there for me to find,” he said. “But if I had a son, I guess I’d advise him to get into something different. From what I hear, there could be a good future in hydrogen.” and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

1 Comment on “The Sunday Times: Return of the wildcat oilmen”

  1. #1 James Hardey
    on Apr 14th, 2008 at 06:44

    Wonderful article but it falls short on one item, how to contact either of these two men. Reson is I suspect I have natural gas on my property. I am not a crackpot nor am I a wildcater. What I need “IS” a wildcater. Can you help me.


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