ustxtxb_obs_1967_07_07_50_00013-00000_000.pdf

Three Men in Texas c ob. Three Merl in Tex a s only 15%. Yet depletion smiles upon the sluggard and the entrepreneur with equal favor! I have not described the final degree of resourcefulness of the companies when they give farmouts. Under common law and the Statute of Frauds, lease interests, being property rights in land, are a form of real property. Therefore, while transactions in year’s period if based on verbal agreement, they are for all practical purposes useless altogether unless they are in writing. Major oil companies, however, characteristically refuse to put a farmout agreement in writing at the time it is reached verbally. pendent may not succeed in getting finanhe fail, the company’s allocated cost of preparing the necessary documents is wasted. \(The independent’s own wasted expense of energy and money, naturally, is not to be representative, “We’ll put it in writing when you are ready to drill.” At the same time he reminds the independent that the company’s verbal agreement is subject to approval by higher managementusually at two additional levelsbut there, the serenity cannot be disturbed even for verbal approval now. “But,” the company representative invariably concludes, “98% of the time higher management goes right along with our agreement.” Having found his financial backing, the independent tells the company he is ready to drill and asks for the agreement in writ ing. The company thereupon responds that higher levels of management have revised the agreement and require a larger share of productionif he finds anyon his tracts than agreed on. What has happened, of course, is that the company had only baited the trap to begin with and has sprung it when it feels sure that the independent cannot afford to back off. I can cite such instances from my own experience means uncommon with others. Because his competitive strength is inferior in money and in rights to real property, the consultant or independent relies heavily for success upon the accuracy and thoroughness of his work and the originality of his ideas. Ideas are often the bulk of his working capital or substitute for it in the ordinary sense. But the right to the economic value of his ideas is far less well secured to the entrenreneur in oil than to the housewife who transmutes last night’s erotic experiences into an imperishable poem among the breakfast dishes and hurries it off to a publisher. Until it is printed, the housewife’s poem is protected by common law copyright and by a vast body of case law, wherever it travels to find a publisher. The publishing industry is, besides, scrupulous in observing an author’s rights. During his often protracted wait after submitting and expounding his geological ideas to secure financial backing, the independent is in a position analogous to the author in search of a publisher, yet no copyrights embedded in case or common law protect him. Each time he is robbed of his ideas, he must construct a theory for his lawsuit, if he can discover all of the facts. Until quite recently, when a lawsuit was brought against a major company, it was a tacit practice of companies or prospective financial backers who received the submission of ideas on an oil prospect from an independent to copy it behind his back a form of theft vastly facilitated by Xerox equipment. If the independent did not succeed in getting his prospect drilled before the brief period allowed by his farmout expired, his information could always be acted on later. without the necessity of giving him his 1/16th share of production. Under threat of lawsuits this practice has noticeably diminished, but case law, at least in Texas, still contains no measure of damages to be awarded even when it can be proven that a geologist’s ideas have been stolen. Once, under very suspicious circumstances, I was unable to get the return of a geological report for an oil prospect from some operators who proved, on investigation, to have a history of pirating reports, and I took my case to a lawyer. He soon found that the nearest precedent for a measure of damages concerned the pirating of an architect’s ideastoo long a reach to assure success in court. Given the long history of oil activity in Texas, this was to my mind additional evidence of the abysmal failure of the independent as a July 7, 1967 13 EDITED BY RONNIE DUGGER. The “incomparable triumvirate” of Texas letters receives a heartfelt tribute in this distinguished book. Some of the many friends of Roy Bedichek, Walter Prescott Webb, and J. Frank Dobie have contributed warm reminiscences, essays, and letters that represent,primarily an inquiry into the excellence of these three notable Texans. Most of the pieces originally appeared in special editions of the Texas Observer devoted to each man; now they have been collected in this handsome hardcover edition, with some new articles added. Thirty-two pages of photographs, many of them gathered from family collections and previously unpublished, enhance the text and evoke delightful memories of a trio the likes of which Texas will not soon see again. Illustrated $6.50* *Texas residents must add two-percent sales tax to total amount of order. BEDICHEK, WEBB, AND DOBIE Essays by their Friends in the Texas Observer UNIVERSITY OF TEXAS PRESS P.O. Box 7819, University Station Austin, Texas 78712