'Wildcatters' Hoping for High Oil Prices

Nov. 6, 2007— -- At gas stations across the United States, people aren't very happy about where the price of oil is heading this week, this month and this year.

But if you're the one pumping the oil, like Cactus Schroeder, those oil prices just keep getting better and better.

"When I get out of the state of Texas I don't spread the news around that I'm in the oil business," said Schroeder.

Schroeder is most certainly in the oil business -- he owns several boutique-scale oil wells in and around Abilene, Texas, and with crude bumping up near $100 a barrel, he faces a whole new landscape. The price of crude oil has never hit the triple digit mark, and just yesterday Schroeder and his team were out drilling a brand-new well. By this morning, they had already drilled a mile into the earth.

Schroeder has a notion there's some new oil to be found beneath the Texas earth, and he has struck oil not too far from his new well site. Whenever you see one of the horsehead pumps in oil territory -- some people call them nodding donkeys -- there's a hole with oil under it that someone's found.

"What I'm looking for out here [are] wells that'll make 100,000 barrels per well … ;in it's lifetime," Schroeder said.

Actually, that's not big oil. It's the opposite: Guys like Schroeder are little oil, working the fields the major oil companies abandoned long ago. The area around Abilene used to be Texaco territory; Schroeder and his ilk lease the land, get some acquaintances to put up money, and then they go for it. You could call it a mom-and-pop operation, but those in the business call risk taking guys like Schroeder wildcatters.

"People think of them as being gamblers, but I'm more of a taking a calculated risk," he said. "And once you weigh the risk versus reward, then you've got a much better idea of your business plan."

Business plan? Risk-reward ratio? Wait. His name's Cactus. This is Texas. Don't we have stereotypes to protect here?