Claytie: The Roller-Coaster Life of a Texas Wildcatter

26, I'm gonna get a baseball bat and beat the son of a bitch to death."

I’m gonna get a baseball bat and beat the son of a bitch to death.” Claytie’s postelection recovery remained in full swing even after the 1994 consolidation and downsizing. With Paul Latham and Mel Riggs already in place, Claytie’s Midland-based, frontline recovery unit included son-in-law Jerry Groner, a lawyer-landman, along with engineer Greg Benton and geologist Sam Lyssy. Groner would assume the title of vice president of land and lease management ; Benton, senior engineer; and Lyssy, geological and exploration manager. “We were a damn good team,” Claytie said. “We made some mistakes , but we also made a lot of money.” Lyssy characterized the recovery as a runaway roller coaster with Claytie at the controls and his foot pressed to the floorboard. “It is either on the accelerator or on the brake—sometimes both at the same time,” he said. Groner, who joined the company in 1990, likewise touched on the “intense” ups and downs, but said his sixteenplus years with Claytie had provided industry exposure equivalent to thirty or forty years with the oil majors. Benton said, “I learned that Clayton could do stuff that I didn’t think was possible.” He cited the successful vendor financing. “When he explained to me how we were going to get the vendors—whom we owed money—to continue to provide services without immediate payment, I thought there is no way these people are going to do this.” Benton said he learned to give the boss the benefit of the doubt, and despite recurring disagreements and intense debates, the recovery forces trusted 26 “ A N E W M I L L E N N I U M 329 one another and pulled together. Ultimately, he said, that’s what got them through the tough times. The successful 1993 public offering coupled with other vigorous recovery efforts had given Claytie breathing room, and he believed the “real danger” had passed. But after going public, exploration activities in Argentina and West Texas both lost money, and unstable oil prices contributed to a staggering drop in the price of the company stock, from around eighteen dollars to less than three dollars a share within eighteen months. That was the bad news. The flip side was that Claytie sold the Floresville ranch and its purebred registered cattle and wisely used the proceeds to purchase a bundle of his company stock at bargain prices. In December 1994, Claytie sold ClayDesta National Bank, which he’d recapitalized twice, the second time with a healthy chunk of investor funds. Then, just four months after the bank sale—and overriding Modesta’s protestations—he sold ClayDesta Plaza, the family treasure. He had little choice: “The building had too much debt, and we were forced to sell it or ante up a substantial amount of money that I didn’t have.” At the team’s first strategy session, Claytie had announced, “Boys, we’re down to our last bullet. We can’t afford to screw up.” Now Sam Lyssy’s thinking, “Claytie just sold the building we’re in; we really are down to our last bullet.” By 1995 management concluded it had tried just about everything , striving to take big steps forward but mostly going backward . Now there was no room for error. With few options, Claytie decided to go back into Giddings, the southeast Texas field that in 1979 yielded the oil and gas production that helped establish Claytie for two years running as one of Forbes magazine’s wealthiest Americans . “We’re cutting back everywhere to focus on Giddings,” Claytie announced. “This is it. This is what we will live or die with.” Years later, Claytie would recall that his companies drilled 307 horizontal wells in the Giddings and Pearsall fields between November 1989 and July 2006. In the crucial recovery period of the early 330 P A R T F I V E ’90s, he was the number two driller of horizontal wells in the United States behind Sun Oil Company. “We had to make it work and we did.” By 1995, Claytie had made virtually all his key personnel changes, and his core group was moving forward again. There would be stumbles, such as productive but noncommercial wells, and some mixed “2-D and 3-D seismic shoots,” oil lingo for the sophisticated geophysical technology used to help locate commercial exploratory targets. Claytie endured one more layoff...