Light "sweet" crude oil futures were fetching about $27 on the New York Mercantile Exchange when the Guitar discovery well came in. After sliding to the low $20 range by year-end, crude prices surged into the $30s by mid-2002, and have climbed into the mid-$30 range this year.
"The way this business works is, people put deals together. Here's the stripper guys, they can look at these kinds of deals, and then here's the next guy," Derrell Riggan said. "Then these guys up here at the top ... get to look at the big deals, because they know they can be capitalized.
"We get to look at pretty much all the good deals now" he said. "When before you know basically we'd look at little ol' deals -- we'd call them annuity wells that would make two or three barrels a day."
Today the Riggans are involved in the hunt for more oil in Howard County east of the Guitar ranch, but they've kept their interest in small-production wells near Merkel.
Annuity wells "ain't going to get you rich, but it will always make you a little bit of money," Donnie Riggan explained.
Initially, the Riggan brothers owned 37.5 percent, the largest share of the Would Have venture. They kept a small interest in the field after selling most for several million dollars in 2002 "enough money to kind of take care of us the rest of our life," Donnie Riggan said.
The Riggans give much credit to Guitar, who talked up a deal early, and to Cliff Smith and his LCS Production Co., who "took the ball and ran with it after we got started out," Donnie Riggan said.
Guitar said he wanted the Riggans in on the deal "because I trust them. I knew they were very knowledgeable about the oil business."
Smith and LCS "had a lot of key personnel that we didn't have," Derrell Riggan said. Not the least of these was Haddix, who spotted the first show of oil in the Guitar 13-1 well.
For its role in the project, LCS was named Wildcatter of the Month for February-March of this year by Drilling Info Inc., of Austin, which collects and sells information about the petroleum industry.
Smith and his staff aggressively sought leases from neighbors of the Guitar ranch, which furnished about half of the Would Have field, Guitar said. Landman Richard Whipple of Abilene, who now works for Crownquest Operating LLCof Midland, spent two years in county courthouses checking land records, and on farms and ranchers large and small negotiating leases with landholders, Donnie Riggan said. Crownquest bought out LCS's interest in the Would Have field and other production in other areas.
Veteran Abilene oilman Ed Patton doesn't see success changing the Riggans.
"They're just down-to-earth, hardworking, honest people that you just loved to deal with," Patton said.
Donnie Riggans still owns his pizza shop interest, but Derrell sold his share to the youngest Riggan brother, brother Danny.
Success has made possible a few lifestyle adjustments, however. The brothers may continue to drive Suburbans, but they now buy new instead of used. And Donnie Riggan said it's nice to be able to pay his daughter's college tuition.
The last couple of years, the Riggans have also taken family vacations to the Mexican playgrounds of Cozumel and Playa del Carmen. Trips to the tropical beach may be nice, Derrell Riggan said, "but when you get back, Merkel looks pretty good."
Occupation: Oil and gas operator, cattleman
Education: Graduate, Merkel High School, 1975, attended McMurry University, 1975-76, Ranger College, 1976.
Family: Wife, Melissa; two sons
Work history: Started roughnecking in oil fields in high school; later did dirt and excavation work at oil well sites; co-owner and operator of Pizza Pro restaurant, 1998-2000
Civic involvement: member, Merkel Church of Christ; Merkel High School Booster Club board; supporter of Bilbo Golf Classic, a fund-raiser for Ben Richey Boys Ranch; and supporter of Western Heritage Classic.
Occupation: Oil and gas operator, pizza restaurant co-owner; cattleman
Education: Graduate, Merkel High School, 1978; McMurry University, 2001
Family: Wife, Tammy; one daughter, two sons
Work history: Started roughnecking in oil fields in high school; later did dirt and excavation work at oil well sites.
Civic involvement: member, First Baptist Church, Merkel; supporter of Bilbo Golf Classic; and supporter of Western Heritage Classic.
Next page 3 is "Participants in An Oil Deal"
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