Fort Worth still an oil town despite XTO Energy’s departure

The Golden Goddess at the Petroleum Club, located at the top of a 40-story downtown office building, has a spectacular view of the city that oil riches helped build.

Seven feet tall and nude except for a strategically placed scarf around her lower body, the Goddess uses both hands to hold high a torch of good fortune. It first sat in the lobby of the Westbrook Hotel in downtown Fort Worth, a place where wildcatters mad with oil fever stayed after the discovery of oil in Ranger in 1917, which turned Cowtown into an Oil Town.

As the story goes, if you rub or pat the statue’s derriere, it will bring you good luck in the oil field. “Look down into my eyes, golden one, and bequeath me with your favors … in black gold!” a lyrical poem written in her honor says.

The Goddess is a part of Fort Worth’s storied oil history, one that is also reflected in buildings and foundations that bear the names of legendary families such as Moncrief, Richardson, Burnett and Bass. It’s also symbolic of the the oil industry’s boom-and-bust nature.

So excuse Steve Eargle, an attorney, oilman and the Petroleum Club’s president, if he is taking in stride the news that Exxon Mobil is moving the bulk of its XTO Energy subsidiary to a sprawling campus outside of Houston, taking with it 1,600 jobs and putting up for sale five of its six downtown buildings.

Eargle and others say the oil business, and Fort Worth’s place in it, will survive.

“This is not good and not something we ask for … It’s painful,” Eargle said from a chair placed at the Goddess’s feet. But, he said, other entrepreneurs and their companies will fill the void left by XTO.

George M. Young Jr., whose family has been in the oil business for generations, also shrugs off XTO’s exodus. He calls it strictly a business decision by Exxon and not a reflection on Fort Worth.

“These things happen in the oil and gas business. It is cyclical. It always has been and always will be,” said Young, president of Collins and Young, a private, independent oil company. “We’ve seen some good times and some bad times, but Fort Worth has always persevered and so has our industry.”

A long list of oil and gas companies continue to call downtown Fort Worth home, including Moncrief Oil, Approach Resources, Range Resources, MorningStar Partners, plus other smaller startups. Jetta Operating Co. is building a new 25-story office tower in downtown Fort Worth.

And oil industry executives and economists also caution against anyone going into a panic about the long-lasting impact of XTO’s move, noting that the local economy is growing rapidly and is much more diversified since Fort Worth’s time as an oil boom town in the early 20th century.

“When you think about Texas cities and classify them, Midland is an oil town and Houston is an oil town and Fort Worth is, too, but it’s many other things,” said Karr Ingham, an economist for the Texas Alliance of Energy Producers.

“Its nickname is Cowtown, for God’s sake. It is not the first thing that comes to mind.”

A rising star leaves town

Clearly, XTO is more than just another Fort Worth oil and gas company.

Founded in 1986 by Bob Simpson, Steve Palko and Jon Brumley as Cross Timbers Oil, XTO literally became a part of the landscape not only with its drilling rigs poking holes all around the Barnett Shale, but by rebuilding and rejuvenating a major part of downtown Fort Worth.

Even after Irving-based Exxon, which bought XTO in 2010 for $41 billion, its employees could be seen all over downtown in their black shirts embossed with the company logo. They seemed to be everywhere. When they weren’t delivering Meals on Wheels, they were building Habitat for Humanity houses.

The connection with Fort Worth even seemed to grow stronger when Exxon, in one of its biggest moves, bought 275,000 contiguous acres in the booming Permian Basin from the Bass family for $5.6 billion in stock and $1 billion in cash earlier this year.

A pioneer in shale drilling and hydraulic fracturing, XTO’s star began to rise within Exxon.

“(Exxon’s) budget shifted to land-based drilling late in the game,” said Bernard Weinstein, associate director of the Maguire Energy Institute at Southern Methodist University in Dallas. “In the ’80s and ’90s, Exxon didn’t think that is where the action would be. … But in the last few years that changed and they’ve gone to more domestic shale plays.”

XTO’s expertise in shale oil drilling eventually convinced company officials, after an extensive study, to relocate the company to its 385-acre, state-of-the-art campus outside of Houston that is big enough to hold 10,000 employees.

“XTO is an important part of Exxon Mobil, and this move will enable collaboration and provide more opportunities to share expertise across the entire corporation,” said Sara Ortwein, XTO’s president, in a statement. “The move is not a reflection of our feelings about doing business in Fort Worth.”

The company is scheduled to move the 1,600 employees in two phases — 1,200 in mid-2018, another 400 in mid-2020.

It plans to keep one building in downtown Fort Worth for about 350 employees working in its Central Division/Fort Worth District, as well as some Midstream Operations personnel supporting its holdings in the Barnett Shale.

After the announcement, it was discovered that XTO had already found a buyer for the former Swift & Co. headquarters it owned in the Fort Worth Stockyards that was put up for sale for $5.4 million. The deal is expected to close this fall. It also has a deal to sell a small building at 801 Grove St. downtown to the Fort Worth Transportation Authority.

Decisions to sell those buildings were made independent of the Houston move, said Suann Guthrie, an XTO spokeswoman. The Swift & Co. sale was made because the company had 500 “vacant seats” downtown. She said Grove Street building was a records center that had been replaced by another one at Alliance Airport.

“In my opinion, this is a corporate decision by the largest supermajor on the planet,” Young said. “It is a corporate decision. It has nothing to do with Fort Worth, but Exxon doing what is right for Exxon.”

With the tough oil market, David Martineau, the former chairman of the Texas Independent Producers and Royalty Owners Association, said he expects most of the employees to follow XTO to Houston.

“The oil industry is in such bad shape now, no one is going to quit their job,” Martineau said. “You would think moving all those people that they would lose about half of them, but I’m not so sure. Used to be they’d say, ‘I’ll go work for XYZ oil company.’ But XYZ oil company isn’t hiring. They will go.”

Losing that many jobs is never good news, but economists say Fort Worth is far from looking down a dry hole. For example, during the first five months of 2015, as the energy sector began experiencing a slump, the economy created 11,300 new jobs in Fort Worth and Arlington, according to the Federal Reserve Bank of Dallas.

At the peak in 2014, the energy sector employed 10,000 people in the exploration and production in the metro area, dropping to about 7,400 by December 2016, or less than 1 percent of total employment, Ingham said.

“If we were in a recession and a major employer left town, that would be noticeable in terms of economic impact,” Weinstein said. “But when you’re in the midst of a regional economic boom in the whole North Texas region, your losing 1,500 to 1,600 jobs doesn’t hit so hard.”

A new generation

One hundred years ago, Ranger, a small town about 100 miles west of Fort Worth, was burning up with drought.

Looking for salvation, residents convinced the Fort Worth-based Texas Pacific Coal and Oil Company to begin sinking wells. When the McCleskey No. 1 came in, producing 1,700 barrels of oil a day, it kicked off a “mammoth oil boom” that led the oil industry to view the Lone Star State as an oil-producing area, according to the Texas State Historical Association.

Hundreds of wildcatters stayed at the Westbrook Hotel, where they patted and ogled the Golden Goddess before boarding one of the trains running between Fort Worth and Abilene that made five daily stops in Ranger.

But that’s only one of the legendary stories about the oil business and its impact on Fort Worth.

The Nancy Lee and Perry R. Bass Performance Hall’s origins can be traced to Sid Richardson’s success in the Keystone fields of far West Texas. Gushers drilled in the Electra Field by W.T. Waggoner, a North Texas rancher, were the foundation for a downtown landmark building owned by XTO.

The Monty and Tex Moncrief Medical Center, Moncrief Hall at TCU and the Horned Frog’s Monty & Tex Moncrief Field are linked to the East Texas field in Gregg County known as the Black Giant.

“This was a town of wildcatters, the small family oil firms that are still kicking around after several generations,” said Quentin McGowan, an attorney and Fort Worth historian. “The Moncriefs. The Dardens. The Hudsons.”

Charlie Moncrief, a third-generation independent oilman, said Fort Worth has lost oil companies, such as Union Pacific Resources, which merged with Anadarko Petroleum and moved to Houston 17 years ago. He sees better days ahead, despite the loss of the XTO operations.

“They (the majors) have come and gone, and the independent operators are going to stay and be significant players in the oil and gas industry,” Moncrief said. “Fort Worth has been through a lot of ups and downs through the years. But Fort Worth has always retained its position in the oil business.”

Eargle agrees. Sitting below the Golden Goddess with a smile on his face, he says: “A few years ago there was a startup called XTO … and at a terrible time.”

This story was originally published June 23, 2017 at 4:32 PM with the headline "Fort Worth still an oil town despite XTO Energy’s departure."