Getting started

1954

In an era when Apache’s critical mass and staying power are assets to be aggressively defended, it is worth remembering that there was a time when it wasn’t always so. The company’s first corporate objective, to survive and be profitable after one year, seems far removed from building a company to last.

Apache Oil Corporation was founded on December 6, 1954, in Minneapolis, Minnesota, by Truman Anderson, Raymond Plank and Charles Arnao. An article in the Minneapolis Tribune that month said the company was involved in the business of locating, producing and marketing oil and gas.

The three partners, fascinated by the investment and tax-shelter opportunities offered by drilling for oil and gas, challenged early employees to develop a name for their venture. Helen Johnson added “che” to APA and was awarded a $25 United States Savings Bond for her efforts.

The newborn Apache operated under principles of accountability, full disclosure and risk diversification. The three partners flipped a coin to see who would be the company’s first president with the understanding that the title would rotate and change hands annually. As fate would have it, Raymond Plank, the founder whose name would become synonymous with Apache and who was the company’s Chairman on its 50th anniversary, won the initial toss.

1955

Apache’s first wells were drilled in the Cushing field located about midway between Tulsa and Oklahoma City. The first Cushing well came in at a whopping seven barrels per day. Apache then drilled the Bradley Rafferty #1 well, with an initial production rate of more than 700 barrels per day.

Closing the books on 1955, Apache achieved the objective: It earned $12,535 on gross revenue of $190,000. Operated oil production averaged 800 barrels of oil per day from wells in Oklahoma and Kansas. There were 23 employees, 173 shareholders and 180,000 shares of common stock outstanding. Apache’s market value approximated $2.5 million.

1956

“If this is such a good deal, why aren’t you selling it in the oil patch?” That was a familiar refrain in the pre-Apache, upper Midwest when less-than-scrupulous promoters sold oil deals to those who were as financially wealthy as they were energy-investment ignorant. The conventional wisdom was simple: If the deal was good, it would have been grabbed by knowledgeable investors in the oil and gas producing states.

As industry demand for new investment grew, Apache developed and capitalized on a strategy that marginalized the unscrupulous and expanded the legitimate investment pool beyond the oil-patch states: In 1956, it developed an SEC-registered oil and gas investment vehicle structured to better protect the investor.

Next: Alternate Paths