Stalking the Wily Wildcat

Anthony Young smiles as he watches the Lucy Newberry No. 9 spit out a plume of oil. The woods are full of the smell of fresh crude, fruity and toasty at the same time, and an air compressor emits an unholy clanking while crewmen perch on overturned buckets, squinting at the orange stream.

The well isn’t exactly a Texas-style gusher, but with oil prices near historic highs, it doesn’t have to be. Young -- a hairdresser in rural Kentucky before he got hooked on chasing oil -- is feeling flush.

Since the 1860s, prospectors like Young have been taking their chances in the Appalachian foothills, fighting their way down through knots of rock. Tennessee’s oilmen have heard the “Beverly Hillbillies” jokes, the comic visions of dowsers with divining rods scrambling up backwoods hollers. The only way to make a million dollars in the Tennessee oil fields, the jokers used to say, was by starting out with $3 million.

But this summer, as the price of a barrel of oil flirted with the milestone $50, independent prospectors all over the United States were drawn into the hunt. If prices remain high, interest will gradually increase in oddball oil states such as Tennessee and Missouri, Virginia and New York. These are places where small-time prospectors coax oil out of the ground at the rate of 10 barrels a day or less -- and where virtually anyone can be an independent prospector.

“A shoe salesman could come in here and get into the drilling business. That attracts people,” said Bill Goodwin, president of the Tennessee Oil and Gas Assn.

There are good reasons major oil companies have steered clear of Tennessee. About 215 million years ago, under the heat and pressure of a continental collision, the rocks in northern Tennessee began to bend. When they broke -- in a series of long, jagged, parallel lines -- oil and gas migrated from deep in the earth into cracks and folds in the rocks. Prospectors in Tennessee spend lifetimes tracing the patterns of ancient breakage; they call it “chasing fractures.”

If there is a reliable scientific way of predicting where oil will be in this terrain, no one has discovered it, said state geologist Ronald Zurawski. Drilling is shallow and cheap here, compared with Texas or Oklahoma, but the biggest discoveries have topped out at 1,000 barrels a day, a payoff too small to attract large companies. Using a vast array of predictive techniques, independent prospectors strike oil about 20% of the time -- roughly the same rate of success as completely random drilling, Zurawski said.

As a result, the oil business here has retained a frontier quality. In Tennessee, it’s not unusual to hear of oil wells drilled on the advice of dowsers or dream interpreters; every year, a Texan television repairman shows up to search for oil with a tool that resembles a copper bicycle handle with a car antenna on one end and a spring on the other. A 78-year-old Baptist preacher approached a Helenwood driller this spring with specific instructions from God.

“The Lord woke me up,” said Herman Faddis, now a leaseholder in a new drilling operation, Divine Energy LLC. “He spoke to me in a small, still voice, and said, ‘I want to send you to talk to these oil people.’ ”

For Young, the path to Tennessee began 20 years ago, when he became intoxicated by the hunt for oil. Then a hairdresser in his native Knob Lick, Ky., he had begun to slip out of the salon during his lunch hours to a nearby field, where he would watch a drilling operation. On those breaks, Young caught sight of his first real oilman -- he wore a big cowboy hat, shiny belt buckle and snakeskin belt -- and thought, “Man, that’s me right there.”

Times were bad in oil then -- he knew that. As president and sole employee of Young Oil Corp., he printed up a set of particularly showy business cards: squares of shiny, solid gold, embossed with an oil well and a toll-free number.

“I knew I might not be able to stay in this business, but I thought, at least they’ll remember the gold business card,” Young said.

Oil prospectors are deal-makers. First, they settle on a prospect -- some patch of ground that has been overlooked or underestimated. Then, they secure a lease from the landowners, who receive a 12.5% stake in revenue from oil or gas found. After that, they set about finding an investor or a partner to share the drilling costs. Finally, they serve as contractors to oversee the drilling.

Young does this work while spinning down back roads in the cab of his truck, wearing jeans, a gold pump-jack pendant and a $1,000 pair of ostrich-skin cowboy boots (he has nine pairs). At 44, he has a puff of blond hair, blue eyes and a neat goatee. His accent makes “business” into “bidness”; for fun, he competes in truck pulls.

Young was lured across the border to Tennessee in the 1990s, intrigued by its expanses of undrilled land. At first, he would drive there out of curiosity and park in the woods to watch a competitor drill. His competitor’s crew became so wary of him that they would shut off the drilling rig when they heard him approaching. So Young hid with binoculars and peered into their drill site. When he saw how much oil they were pumping, he ran out and leased the land on both sides of the spot.

“They was very shocked,” Young said. “As the old country boy said, he got out-snookered.”

This began a string of successes in Overton County, a hilly region near the Kentucky border. These days, Young has an office in Knob Lick, where six employees make cold calls to potential investors. They dial numbers off “lead lists” of people with a history of investing in high-risk ventures, such as gold mining or film production. Cold calling accounts for about 35% of his investors, he said; the rest are repeat or word-of-mouth business, he said.

“He can raise more money driving down the road from Knob Lick than I can make during 20 trips to Texas,” said Goodwin of the Tennessee Oil and Gas Assn., an old friend and occasional promoter.

The important conversations with investors go to Young, who has developed a fine antenna for human emotion.

Among the things he has learned is that for investors -- retirees, widowers and desk jockeys -- investing in distant oil wells is about romance, not financial strategy. Young sends them videos of himself in the Tennessee woods beside the bobbing head of a pump jack.

“They want someone that’s not just sitting in a plush office all day,” he said. Old people, especially, “love the old country accent. They tell me, ‘I just love talking to you.’ ”

The last 20 years were punishing for independent oil operators. As oil prices fell to $9 a barrel, the number of American prospectors dropped from 15,000 to fewer than 5,000 today, according to the Independent Petroleum Assn. of America.

The ones who stayed in the business grew philosophical; Goodwin jokes that you can tell a Tennessee oilman because he drives a Cadillac with 300,000 miles on it. Nakedly exposed to pricing cycles, they learned, as Deloy Miller of Miller Petroleum in Huntsville puts it, “to scale up and scale down, kind of like a balloon.”

The flip side is this: Because they are cheaper, nimbler operations, small-scale prospectors are among the first to feel the buoyant effect of high prices.

Drilling -- by large companies and independents such as Young -- is noticeably up in the U.S. Last week, 1,638 rigs were drilling wells across the nation, nearly all of the rigs available in the country. During the same period last year, about 1,400 rigs were at work, according to Rigdata, a service that compiles information on the oil industry. Permits for new drilling also rose by 20% over last year.

Now focusing his efforts in Tennessee, Young drives in most days from Knob Lick. On a recent afternoon, he visited the scene of his latest successful drilling operation, named the Lucy Newberry No. 9 after the elderly widow who owns the land.

Pulling off the road and down a hill thick with mud, Young sat there for a while, watching oil collect in lined pits in the ground. Released into the open air after millions of years in a pressurized pocket, it is greenish now, not orange, because bubbles of hydrocarbon gas have escaped into the air.

The well will pump about 80 to 90 barrels a day of thin, sweet oil, a grade valued for motor oils and gasoline.

On his cellphone, Young called the well’s investor, a businessman from Bombay, India. Then he visited Newberry in the fluorescent-lighted office of the Overton County Election Commission, where, at 84, she still shows up to work every day as the administrator of elections.

“I’ve always been a lady that works for a living,” Newberry said.

“Except for possibly being an oil tycoon,” she added coquettishly.

There is subterfuge in the business, as there was when wildcatters wandered Oklahoma and Texas.

Early in his career, Young built a network of informants who let him know when a competitor had struck oil, so that he could lease the land beside it. When negotiating a lease on a choice piece of property, he has been known to lock a lawyer’s office door from the inside to head off the possibility of a counteroffer.

On the subject of geology, Young is thoughtful, almost scholarly. Although outsiders came into the hills with one predictive technology after another, Young came to trust methods that came into fashion before the Civil War.

He uses what he calls “creekology,” the art of eyeballing creek beds and other geological formations in order to predict the location of fracture lines, and another method he calls “closeology,” the technique of drilling beside productive wells.

He talks about his consulting geologist with a respect that verges on reverence, but keeps his name a secret.

At the drilling site, a tool-pusher named Howard Isabell listens to Young talk about geology and smiles indulgently.

“I’ve seen a lot, a lot of geologists. A bunch of them,” Isabell said.

“You’ve got to make a hole in the ground. That’s the only way you’re going to find out.”

Isabell has drilled one well a week for the last 20 years; at 62, he still daydreams about drilling into a deposit of diamonds, gathering them up with his hands, and skipping town.

The reason Young has struck oil so often, Isabell says, is the same reason anyone else has struck oil in Tennessee: luck. Maybe some instinct. But a whole lot of luck.

From the cab of his truck, Young smiles serenely and keeps his mouth shut. In the oil fields, he says later, this is a compliment.

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Times staff researcher Rennie Sloan contributed to this report.