When Travis Thompson was just seven years old in 2000, he learned being in the oil business was a lot more about hard work than rolling in money.
Times in the industry were tough back then with oil at just under $9 per barrel. The young child needed to help his father keep the family oil company in business in order to put food on the table.
“We had no choice,” said Thompson. (My dad) couldn’t afford to pay people to work. I’d do anything I could to help since he was busting his butt just so we could keep our house.”
Thankfully, his father was able to hold on and now, more than 10 years later, his son is following in his footsteps. The younger Thompson started Travis Thompson Oil Corp. in 2012, and already the sophomore geology major and business scholar has drilled four wells in less than two years.
Located in his hometown of Mount Carmel, Ill., 40 miles northwest of Evansville, Ind., the majority of his production centers in southwestern Indiana in Gibson County; Thompson shares a percentage of the mineral lease rights with his father.
“I guess you could say my father’s my only investor. I’ve got a good dad; he takes care of me.”
To start, Thompson looked at past well data for a specific area; if there were already successfully producing wells nearby, chances were, the surrounding land would produce. He also looked at old geological maps dating back nearly 100 years ago that showed numerous oil rich areas.
Next, Thompson secured the mineral rights in a competitive bid. A typical lease runs anywhere from one year to five years, depending on several factors, including how quickly a company wants to begin drilling.
One of Thompson’s tracts includes a 60-acre parcel sought after by competitors for many years before he caught a lucky break and was able to secure the leases.
While believed to be an oil rich area, Thompson said it’s always a gamble until you drill that first well.
“We’re going to have six wells there and have drilled three already,” he said. “We decided to stop and get the wells pumping to have some money coming in.”
Out of the three wells drilled so far, Thompson predicts they will eventually produce 150 barrels a day. With oil prices currently averaging $100 per barrel, the monthly gross could easily reach six figures.
He’s quick to point out that for now, he’s no tycoon. The money Thompson earns goes back into the business, and the costs are extensive.
“To drill and set pipe, which means to run casing in the hole and put cement in the back side of the pipe, costs about $70,000 a well.”
Fortunately, having a father already in the business means he has access to all the equipment he needs. Thompson added that so far, he and his father have been able to do the work with only a few part-time employees, but admits it’s a struggle during the school year. It will be especially so this spring when Thompson joins Hanover’s baseball squad.
Getting the oil from the ground to the point of sale can take up to a couple of months. Until then, Thompson is happy with how his business has grown so far.
“I’m very grateful for where we’re at today,” he said. “It’s been a blessing to get to where we are.”
You can learn more about Thompson's oil company at travisthompsonoilcorp.webs.com.
Published Monday, December 16, 2013