Interview of Roger McCoy, January 24, 2024

Rex Buchanan: Good afternoon. I’m Rex Buchanan, the former director of the Kansas Geological Survey. Today is January 24, 2024. We’re here to interview Roger McCoy for the Kansas Oral History Project. Our videographer is former Representative Dave Heinemann. We thank Mr. McCoy for hosting this interview at the McCoy Petroleum office in Wichita, Kansas.

Roger McCoy is a native Kansan who grew up on a farm near Spivey, Kansas, in Kingman County. He graduated from Attica High School in the mid-1950s and took his first job in the oil industry, driving a tank truck during the summer before he started at Wichita State University. Roger graduated from WSU with a bachelor’s degree in geology in 1959.

Roger’s entire career has been in the oil industry. Immediately after graduating from college, he took a job as a staff geologist for Musgrove Petroleum Corporation, working in Kansas, Nebraska, and Oklahoma. In 1962, he began working as an independent consulting geologist, which he continued doing for over a decade until he founded McCoy Petroleum in 1970. While pursuing his career from 1959 to ’61, Roger served in the Kansas Air National Guard, leaving the service at the rank of First Lieutenant Fuels Officer.

This interview is part of the Kansas Oral History Project series, examining the development of public policy at the nexus of energy and the environment during the late 20th and 21st centuries. In these interviews, we explore those policies through the eyes of experts, executives, administrators, legislators, environmentalists, and others. The Kansas Oral History Project is a nonprofit corporation created to collect and preserve oral histories of Kansans who were involved in shaping and implementing public policy. Recordings and transcripts of those oral history interviews are accessible online at ksoralhistory.org and through the Kansas Oral History Society and the State Library of Kansas.

The Kansas Oral History Project is supported by donations from generous individuals and grants from Evergy and ITC Great Plains. Thank you, Roger, for agreeing to share your insights and having us here, and thank you, David for volunteering your videography skills.

So, with that, Roger, I appreciate you doing this. One of the things that’s real hard to miss with you is what a broad range of jobs you have done in the oil business. You’ve done a bunch of things. How did you get started down that road?

Roger McCoy: [It started] when I was driving the [oil field] water truck. Of course, at that time, after I got out of high school, I thought I’d be going to Kansas State [University (KSU)] and probably taking agriculture. I was fascinated with all of the drilling that was going on in the Spivey-Grabs area, down into Barber County, clear down into Oklahoma in the Osage band down there. [“Osage band” refers to the Osagean stage, one of four subdivisions of Mississippian-age limestone formations.]

While I hauled water to several different drilling rigs at that time, there were a lot of other rigs [in that area]. There were probably twenty-five or thirty rigs running at that time in that area. The geologist on a well that Sohio was drilling south of Medicine Lodge [KS], along the Gyp Hill Road, was a geologist by the name of George McCaleb. I got to talking to him about what he was doing. He told me he was making $75 a day sitting out there in that little trailer house [at the rig]. I thought, “Man, there’s not that much money in the whole world.”

So, he told me a little bit about what he did. He let me look through his microscope and all that. I thought, “This is really fascinating.” He asked me what my plans were, and I said, “Well, I’m planning to go to Kansas State and study agriculture.” He said, “Well, if you’re interested in geology, you could probably get a job while you’re going to school in Wichita.” I said, “Well, that would even be better.

So, he encouraged me to look into it. I did, and I enrolled in [geology at] Wichita State then, which at that time was the Municipal University of Wichita.

RB: I was going to stay in our introduction, it was referred to as Wichita State, but I’m pretty sure that wasn’t the name.

RM: No, it was the Municipal University of Wichita at that time.

RB: So, that period that you’re talking about in the fifties is kind of the peak time for oil production in the state, really one of the peak times of exploration. Things must have been really going gung-ho back in that time.

RM: Well, at that time, my world was that little strip fairly close to home through Kingman, Harper, and Barber counties. The majority of the leases in that area [at that time] were the major [oil] companies. Now the major companies were making a lot of farmouts[1]to independent companies like Mull and Pickrell, companies like that. They drilled a lot of wells down in that area. There were a lot of big rigs down there that came up out of Oklahoma. One of the rigs that I was hauling water to was owned by Harry Bass Drilling Company out of Fort Worth. That was the Bass family rig. They were drilling for Magnolia at that time.

RB: That’s interesting. I grew up in the late fifties, early sixties, and sort of came along at the tail end of that. But even then, there was still a lot of drilling going on in the state. Every time you would drive some place at night, you’d always look out and see drilling rigs somewhere. It was just part of the landscape. That’s sort of how I envision that time in the fifties like that.

RM: Yes, it depends on where you were in Kansas, but most places, you could see a lot of rigs for a long way. From our farm, which was about three miles north of Spivey, during the time that I was in high school, they were drilling south of Spivey. We could see five or six rigs running just from the lights from those at night.

RB: So you went to Wichita, we’ll call it Wichita State, and you graduated with a degree in geology. You were working then during that time?

RM: I was very fortunate to get the job with Musgrove Petroleum. It was really like having a four-year apprenticeship. They had like eight rigs running at that time, and they were drilling on the Central Kansas Uplift and a lot in southwest Kansas. They also had a rig running in Oklahoma. They were drilling for Panhandle Eastern and others in southwest Kansas.

So, the summer between my freshman and sophomore year, they sent me to the field to roughneck on one of their rigs. It was out in the Elkhart area [of southwest Kansas]. We drilled one well in Texas County, Oklahoma, and we drilled several wells in the Greenwood [gas] field. So, I got some pretty good—I don’t know if “experience” is the right word or not, but I saw a lot and learned a lot.

RB: But experience as a roughneck? Not sitting wells then?

RM: Oh, no, that was just as a roughneck. Another thing, it was working with the geologists. [Musgrove] had like five geologists on staff at that time. The geologists liked to teach the young guys something.

RB: Sure.

RM: I was eager to learn. It was a great learning environment. Also, during that time the FPC [Federal Power Commission] had control of all of the [interstate] gas wells. [Musgrove] was drilling some gas wells that [required hearings before the Kansas Corporation Commission [(KCC, Corporation Commission)]. That was when I was introduced to the Corporation Commission. [At the KCC] hearings, they’d have to have exhibits. I was actually hired not only just as an errand boy, but also as a draftsman. So, I was drafting the posters and exhibits and maps and such that they would use at the hearings. So, I’d get to sit through the hearings at that time.

The attorneys [for Musgrove] at that time were Bob Martin and, Bill Schell, another one in that firm, and George Colins, who was one of the real pioneers in the oil business, legal part of it, a lot of experience just working with these people.

Musgrove was also drilling in Michigan at that time. They were drilling the Niagaran Reef up there.

RB: So, when did you sort of begin the transition from those kinds of roughneck/drafting duties to a full-fledged geologist sitting on wells.

RM: Actually, not the sitting on the wells until I had the degree [in geology]. But I went out with the geologists [drilling wells during] on summer vacations—I say “summer vacations”—any time there was a break in school, I’d go out with the geologists. They almost always had a geologist out on a well. So, I’d go out with them. So, I got a lot of experience just doing that at the time.

I wasn’t the only one at Wichita State at that time that was going through the same thing. We talked about Bob Walters there earlier, Walters Drilling. Don Beauchamp was there. He was a contemporary, and he was working for them as a geo-tech I guess is what we’d call them now. A number of us that got jobs when we graduated, we got jobs because we had been working as a geo-tech. The ones that didn’t went to work for Boeing, [or in another field].

RB: So, it was almost like you had an internship, and then you moved from an internship—

RM: Exactly.

RB: I’m trying to figure out the way to ask this question. I can’t quite put my finger on it. Maybe you can help me with the answer. What was that like at that time? I just have this vision of—the oil and gas business was really active. I mean, it was just going to town. How did that feel? I can’t think of a better way to articulate this.

RM: Well, for a farm boy, it was a big deal.

RB: I bet. But how so? Was it exciting?

RM: It was exciting, yes.

RB: In terms of money, you were making or the places you were going?

RM: Not the money. I was working for $1.25 an hour, which that was—it certainly helped. My first job as a full-fledged geologist was for $450 a month.

RB: But in terms of sort of the excitement around the amount of work going on and all the wells that were being drilled, and some of them I assume were pretty good wells back in those days.

RM: Yes.

RB: That all must have been pretty exciting.

RM: It was very exciting. It still is.

RB: We’ll get closer to present in a second. So, in the sixties, you’re really working for another company.

RM: Yes.

RB: And I assume just piling up more experience mostly in Kansas in that process?

RM: The first wells I watched were in Kansas, Kingman County, Barber County, and the Forest City Basin. Musgrove was developing the John Creek Pool, an extension to the south of the John Creek Pool in Morris County. That pool was discovered based on surface geology, and there was surface [work] that showed a little [structural] closure to the south of the John Creek Pool. Earl Knighton had brought Musgrove the prospect, and they drilled four or five, about six wells in there. They extended the field to the south. The first wells that I went out on were up there in the Forest City Basin.

RB: Really. So, a pretty different environment than southwestern Kansas or south-central Kansas, whatever you want to call it.

RM: Yes. Then Musgrove had taken a deal. This was after the Yaggy Pool discovery up there.

RB: Reno County?

RM: No, the Geary-Riley [County] area up there.

RB: Oh, yes.

RM: Continental Oil Company had a big block [of leases] up in Gage County, Nebraska, across the line from Kansas up there on the Salina Basin side of the Nemaha Ridge.

RB: The Humboldt?

RM: They were looking for a pinch-out trap[2] of the Hunton up there. Musgrove took that farmout from [Continental], and they set me up there to watch that well. There was a close dry hole] that had been drilled on Nemaha Ridge, but it hit granite at 900 feet [so most of the potential pay zones were gone.].

RB: Pretty shallow.

RM: That didn’t do any good.

RB: Right.

RM: So, we went down into Washington County, Kansas, to find a well that had a full section of Hunton in there, and that was like twenty miles away from where we were drilling up there.

One of the partners didn’t want a young geologist with limited experience out there watching that. Mr. Musgrove said, “Well, do you know anyone that has experience up there?” There wasn’t anyone that had experience up there. So, I ended up watching three wells. They were all dry. We didn’t hit the pinch-out. The first one had like 200 feet of Hunton in it, and we didn’t have any shows.

RB: So, you were getting kind of a variety of experiences.

RM: Yes.

RB: Then during the sixties in effect is what’s going on.

RM: Yes.

RB: So, what provoked you to want to go out on your own then?

RM: I got laid off.

RB: I guess it was provoked, but not by you.

RM: [Musgrove] really didn’t need another geologist when they hired me when I got out of school. But they went ahead and hired me to give me some experience. So, I was laid off and put out on my own, but I had watched a lot of wells for them already at that time. I thought I had enough ideas that I could go ahead and sell some deals and keep an override and get the well setting on it. And I was fortunate to be able to do some of that.

RB: So, what in the world did you focus on when you first started doing it?

RM: More of the Kingman, Harper, Barber County area.

RB: The world that you’re from.

RM: Yes. And the beautiful part of that was that people were drilling in the arch on seismic[3]. Seismic really didn’t do much good in the strat play through the Kingman, Harper, Barber [counties] area in there. So, a little guy had about as good a chance of finding something as the big guys did there. I was fortunate to be able to sell some deals and get some work.

RB: A couple things about that. By the time I’d come along, everybody talks about Kansas as being just independents, and the big companies are all gone. At that time you’re talking about, are they still active at that point?

RM: Yes. The big companies, most of them all had either division or district offices here in Wichita—Gulf, Mobil—even though Mobil at that time was Magnolia—Cities Service. Through the period of time that I was in school and doing my other work, I met a lot of the people. I went to the KGS [Kansas Geological Society] meetings and all that and met a lot of the geologists with the major companies.

When the major companies started leaving during—really the late sixties, early seventies, they started leaving, and they started making farmouts and really opened up the world for the independents at that time.

RB: I tend to associate kind of the last vestige of those big companies with Hugoton and natural gas in southwestern Kansas.

RM: But that was because they had held-by-production acreage[4] out there. That was another era that the majors stayed out there because of their held-by-production acreage. The deep rights are another story.

RB: And before we go to that, just to back up, you said you’d basically sort of come to the part of the world, back home to the part of the world you were from. Were you putting leases together yourself? Did you have somebody doing that for you?

RM: Some of them I bought myself, but that really was not my area of expertise. At that time, you could buy most leases for a dollar an acre, a ten-year term.

RB: Ten-year?

RM: And a 1/8^th landowner royalty. Now you had to find some place that wasn’t already leased, of course, but the majors started dropping their acreage, so there was quite a bit of acreage that came open.

RB: This is kind of tangential, but was there any advantage to being local when you went in to try to get those kind of leases?

RM: There certainly was down there.  I used a local lease broker. Strong’s Inc. had bought acreage for a lot of the majors and for a lot of people. I knew their people. So, I had them buy acreage for me. I paid them a commission on it.

RB: Let’s go back to southwestern Kansas. When did you start being active in that part of the world? Does that come quite a bit later?

RM: That came later. That came with the deep rights legislation [5].

RB: Let’s talk about that a little bit. Just to sort of give you some background, one of the issues that comes up over and over again is we have these conversations about energy in Kansas is the role of federal government and how when federal government makes policy changes, the impact that it has on everybody, but particularly energy production people. So, talk to me a little bit about that change.

RM: Actually, we can go back to about [19]82 or [19]83, something like that. We had been drilling in the Spivey-Grabs area, the Kingman, Harper, Barber [counties] area. We were just kind of corner shooting. We’d find a dry hole that had some good shows, and we’d think we could get to a better spot. We were drilling those types of deals.

The price of oil—I’ll back up a little bit further. My oldest son, Kevin, graduated as a geologist from Wichita State. He went two years to KU, and then he came back so he could work for me while he was in school. He graduated from Wichita State, and we were continuing to work in that area. We had spread out into Stafford [County] and Pratt County, that area up there. Kevin had worked a lot of proposals in that area or had worked a lot of geology in that area.

When the price of oil dropped in 1986 the—here, again, I may be messed up in my time, but in the early eighties there—the economics of where we were drilling in southern Kansas just didn’t work. So, I told him, fresh out of school and such, “We needed to concentrate on an area where, if we found something, it was good.” We were looking for 100 barrels-per day wells, not 20 barrels per-day.

We looked around for places to go, and you look at Pleasant Prairie and the deep production under the Hugoton [natural gas field]. It was good stuff. So, I said, “Let’s work the Hugoton area. We can’t get any new leases, but I think we can get farmouts.” I had dealt some with Mobil and Gulf and some of the other majors in south-central Kansas. So, I knew some of their land men and knew how to talk their language anyway.

We did not drill a single well in [19]86. We had been drilling ten to twenty wells a year until that time. We spent all of our time just basically mapping the shallow beds out there, trying to find deep structure. We didn’t have any geophysical data [to help confirm our maps]. We were just looking for the deep structures from the shallow control.

And he or we came up with ten prospects in the deep Hugoton. Of those ten, eight of them were on Mobil acreage. Of course, Mobil had a tremendous amount of acreage out there. So, I had worked some with Mobil. Actually, the first well that McCoy Petroleum drilled was on a Mobil lease that I bought, which was next to our old farm.

I called [Mobil] for a farmout because the deep rights legislation was going on at this time, and the majors were getting afraid that they were going to lose their deep rights if they didn’t go ahead and do some exploration on it. So, I called, and he said, “Well, you’re a little too late. We’ve already farmed that out to a company called Western Gulf.” He said, “They have to drill a number of wells in there. They’re behind on drilling what they need to drill on it.” He said, “Why don’t you just call them and see if you can get a farmout of the farmout?” He said, “We know you, and we can deal with you.”

So, we called them. They had sold an interest in [the Mobil farmout] to a company out of San Francisco. They got Mobil’s seismic along with it. It was mile-line seismic that they had done in order to hold the acreage out there to prove that they were doing exploration on it. It takes a long time to digest all that seismic [data], starting off from scratch. They were having a hard time coming up with locations. So, I said, “We have some [locations] out there that we think are drillable right now.” They said, “We’re going to do this. We’re not interested in [help].”

Well, a month went by, and we called them again. They said, “Tell us about the locations that you want to drill out there,” and I said, “We’re drilling off of the shallow structure, but we think they’re good prospects.” They said, “Well, why don’t you come out to California and talk to us?”

We went out to San Francisco, met with them, and we took a chance and took our maps with us. We showed them our maps. They said, “Well, do you think you could get this drilled?” I said, “Yes, we can get it drilled within the time frame that you have to do it.” They said, “Do you have it sold?” I said, “No, we don’t have it sold yet. We won’t have any trouble.”

They turned around and took an interest with us in their own deal. We hit three discoveries on our first four wildcats out there.

RB: These are oil wells.

RM: The three were oil, yes. We had a St. Louis well and two Morrow oil wells. [St. Louis and Morrow are oil and gas producing formations.]

RB: Do you then start doing a fair amount of drilling for natural gas later on as part of this process of working out there?

RM: We didn’t really target natural gas under the deep unit [Hugoton]. But we found a huge gas well out there later on on one of them. We weren’t really drilling for gas, but we found it. It had a 40-foot pay zone in the Morrow, and we had an 11 million drill stem test on it. The open flow on the well was 184 million. We put it online, selling out of both the tubing and the annulus at a rate of, over 10 million a day. It sold 3 billion cubic feet of gas in a relatively short period.

RB: And this is in this period where now you’re starting to look at natural gas deregulation. So, prices are changing. Drilling patterns are changing. The whole world is changing out there.

RM: Actually, that was during the—when FERC [Federal Energy Regulatory Commission] took over, and we had the various tiers [of prices], and that was a deep discovery. So, we got the high price of gas on the well.

RB: So, you got basically the new price as opposed to the old price.

RM: Yes. All of that was deep. So, we didn’t have that 104 price or whatever they called it, basically the price that had been paid for the old wells.

RB: Is that really then where your focus is for quite a while, southwestern Kansas?

RM: Yes. We ended up getting the farmout directly from Mobil. We renegotiated it, and it was a ten-year deal as long as we kept meeting certain criteria. We had some good discoveries out there. Later on, we went ahead and worked with Berexco. They had deals with Amoco and UPRC and several other companies that they were getting farmouts from. We formed a joint venture, and together we found— we drilled over 400 wells, deep wells out there during that ten-year period.

RB: So, a ten-year period. What years are we talking about? From mid-eighties to mid-nineties?

RM: The late [19]80s and the early [19]90s. Middle [19]90s.

RB: That’s a lot of wells. Are you always contracting out your drilling, or did you own rigs yourself?

RM: We didn’t own rigs ourselves. We had Sweetman Drilling who had done our drilling in south-central Kansas. He moved his rig out there. He had two rigs. He did our drilling out there. Berexco had their own rigs, Beredco Drilling Company. They drilled some of our wells. Our deal with them, they drilled on farmouts that they received, and we drilled on farmouts that we received. It’s one of those deals out there—when you have a little success, it’s a lot easier to work deals with other people.

RB: I want to talk about some policy things, but before we do—then you hit a period in the nineties, I don’t know, early 2000s maybe, 3-D seismic comes along, horizontal drilling comes along. The world kind of changes again pretty dramatically. Obviously, you were engaged in that world.

RM: Yes.

RB: When did you start using horizontal wells?

RM: On the horizontal, we have drilled two horizontal wells ourselves. We actually promoted—I say “promoted” —we sold a deal in Harper County about five years before the horizontal play started down there.

RB: Before it took off.

RM: We sold a deal to Abraxas to drill a horizontal well in the Spergen-Warsaw band through there. We had drilled some successful gas wells in the Spergen-Warsaw. You had to kind of take what you got because if you fracked those wells, you went down into the Osage and got a lot of water.

RB: Water. Let me ask you something about that. You obviously were real active in that Harper, Barber County area. When this big Mississippi lime thing blows up, how engaged were you in that, and what did you think of it?

RM: I thought they were crazy when they started out because they had to handle so much water.

RB: Exactly.

RM: They built the infrastructure to be able to handle the water and make it work. We had—I’ll back up a little bit. In [19]72, we had leased over 15,000 acres almost in a solid block in Harper County for $1 an acre 10-year leases and such. We drilled a number of gas wells, just small little pools that we found.

One of these was the Wharton Pool—what did they call that? I think it was Wharton. We got a well, completed it for 5 million gas, just top setting in the Warsaw pay zone, staying out of the water. That well and the south off-set to it ultimately made—the first one made a billion and a half, and second well made just short of a billion.

Later on, when Sandridge started doing the horizontal, our wells were pretty well depleted at that time, and Sandridge came to us. They wanted to buy our wells and drill a horizontal on our leases. I looked it up yesterday. They drilled a well across the same leases, it’s a mile-long horizontal across that same acreage that had made over 2 billion cubic feet of gas. That horizontal well has made 44,000 barrels of oil and 1.2 billion gas additionally. It’s still selling about a half million gas a day. And we had another little pool to the east of that. Sandridge came in and drilled a mile-and-a-half horizontal lateral on it. It has made just short of 3 billion cubic feet of gas and 135,000 barrels of oil.

So those wells were very successful. They’ve got a lot of them down there that weren’t successful, but some of the stuff was good if they could handle the water. They gave them the big fracks, and they did get down into the Osage, and they had to handle the water to make it work.

RB: And then they created seismic problems that I got to deal with.

RM: Exactly.

RB: But by then the world—in terms of leasing rates, just go completely crazy.

RM: It affected the whole state.

RB: Yes, up even like Colby. I mean, it was nuts, wasn’t it?

RM: Yes. We’d gone from the $1 an acre lease to $5 to $10 an acre and 3 to 5-year terms on things. They came in and they were paying $300 to $1,000 an acre for stuff down there. It made it where you couldn’t play that country. The problem is, they thought that whole Spergen-Warsaw band was going to be good all the way up into Ness County and through there. They paid that kind of money for leases way up there. We’re still fighting that.

RB: That even brought temporarily one of the majors back into the state for just a little while, not very long, but for a little while. And then it just all kind of did what you probably figured it was going to do, right?

RM: Right. The horizontals work, if you’ve got the right situation. I said we had drilled two of them ourselves. They are in Meade County, and it’s in the Chester Lime. We had drilled some Chester Lime oil wells in Meade County. It was a gas solution-type reservoir. We didn’t make any water or very little water.

We drilled our first one, kind of like Sandridge, we drilled, we went next to some wells that had already made over 100,00 barrels of oil. The new horizontal well has also made about 110,000 barrels of oil now. It’s still making about 18 barrels a day. It makes very little water. So, our operating costs are low on it, but the cost to drilling the horizontals with the cost of casing and the frack jobs are very high, so they have to make a lot of oil to be commercial.

RB: I know in that period, you would look at some of the costs on those horizontal wells and then water disposal, and you’d put them together and just scratch your head and think, “What do they know that we don’t know?” because it doesn’t make any sense. Well, a lot of times, it didn’t make any sense.

RM: Yes. The way they made it work in southern Kansas is having the saltwater disposal infrastructure.