How to Turn a Dry Hole into a Fortune!
As Told By My Grandfather
I will tell this story as I remember it. My grandfather, Jesse Franklin Drury, was a skilled cable tool driller from the early days of oil in Oklahoma and Texas.
A lawyer from Houston was having a hard time in central Texas. All of his friends were making money in the oil fields, but his holes were all coming in dry. Unlike his friends who started out poor, Howard R Hughes Sr. had been well off before he invested so much money in dry holes. Now his friends were rich but he was running out of time and money.
One evening, as was their custom, Howard and his newly rich friends were having dinner in a café in Corsicana, Texas. An insistent man came to their table trying to show them an invention he had designed. The other men were not interested, but Howard was. His friends left as he gave the persistent man his undivided attention.
The stranger was a water well driller. They had been wearing out bits in the hard rock formations below Corsicana, Texas as they searched for water for the city. He had designed cutter wheels and the bit was cutting right through the hard rock.
Most of the oil wells in the part of the country were shallow and punched by cable dropping heavy bits into the hole. The new invention was used with rotary drilling which wasn’t much used for oil. Howard’s luck had not been too good up to this point, but he was not a stupid man. He saw potential.
How much would you take for something like that. The man said it would be worth at least a thousand dollars—a sum that seemed excessive at the time. Howard Hughes didn’t hesitate. He wrote him out a check.
The Hughes Tool Company would go on to patent the drill bit and the design would be further refined, making both men rich Howard R Hughes may not have been good striking oil, but he knew how to make and market drill bits. Instead of selling the new bits outright, Hughes Tool would only lease them. With the improved Hughes rotary bit, the oil business changed. Drillers went deeper and deeper for the black gold, and they needed the special bit to get to the oil. Howard Hughes refused to sell the bit. Instead, he leased the bit and serviced it through the whole drilling process.
For many years the Hughes Tool Company was one of the most profitable companies of in the world. It would be the springboard for which the eccentric Howard Hughes would become one of the richest and most mysterious men in the world.
The past does not equal the future. It doesn’t matter how many failures have come before, success requires courage of action. A capitalist must persevere.