The Texaco connection - FOX 8 WVUE New Orleans News, Weather, Sports

The Texaco connection

Updated:

The connection between Texaco and the Win or Lose Corporation raised questions with one state employee in the 1940's.  Here is why.

In five of the six state leases awarded to W.T. Burton, he assigns some royalty interest in the lease to the Texas Company, or Texaco -- they would handle the drilling.  Burton kept some of the royalty interest himself and assigned the rest to the Win or Lose Corporation.

STATE LEASE 334

  • 12/30/35 – Burton awarded lease – pays state $15,000
  • 12/30/35 – Burton assigns part of the lease to the Texas Company – the Texas Company pays Burton $39,500
  • BURTON/WIN OR LOSE MAKE $24,500 PROFIT

STATE LEASE 318

  • 7/3/1935 – Burton awarded lease – pays state $32,750
  • 7/3/1935 – Burton assigns part of lease to the Texas Company – the Texas Company pays Burton $70,500
  • BURTON/WIN OR LOSE MAKE $37,750 PROFIT

STATE LEASE 335

  • 12/13/35 – Burton awarded lease – pays state $50,000
  • 1/21/1936 – Burton assigns part of the lease to the Texas Company – the Texas Company pays Burton $90,000
  • BURTON/WIN OR LOSE MAKE $40,000 PROFIT

STATE LEASE 340

  • 2/4/1936 – Burton awarded lease – pays state $75,000
  • 2/15/1936 – Burton assigns part of the lease to the Texas Company – the Texas Company pays Burton $95,000
  • BURTON/WIN OR LOSE MAKE $20,000 PROFIT

STATE LEASE 341

  • 2/18/1936 – Burton awarded lease – pays state $5000
  • 2/28/1936 – Burton assigns part of the lease to the Texas Company – the Texas Company pays Burton $5500
  • BURTON/WIN OR LOSE MAKE $500 PROFIT

In all five instances, Governors O.K. Allen or James Noe award the lease to Burton and within a few days, Burton handed over part of the lease to Texaco, receiving a bonus payment from Texaco for some of the rights to the lease.  The quick turnaround gave Burton and Win or Lose a profit of $122,750.  In today's dollars, that's two million.  They never drilled a well, just submitted a bid and made a lot of cash.

This had one state employee point out in a 1941 memo, "It should be noted... the Texas Company submitted no bid for the lease from the state."  

If the Texas Company was interested, why didn't they bid?  Waiting on Burton to assign the lease cost the Texas Company almost $123,000, but also a significant amount of royalty interest.  Burton kept 4.1 percent of the royalty interest himself, to be split with Win or Lose.  So not bidding on the lease cost Texaco the upfront money and 4.1 percent of the profits over time. 

It led that state employee Edward Gay to wonder if this was a "conspiracy to hinder free competitive bidding on the lease," and he said the state needed to prove "the Texas Company was parties [sic] to the conspiracy."

Powered by WorldNow

Fox 8 WVUE-TV
Louisiana Media Company, LLC.
1025 S. Jefferson Davis Parkway
New Orleans, LA 70125

General Number: (504) 486-6161
News Tips: (504) 483-1503
News Room Fax: (504) 483-1543

Can't find something?
Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and WVUE. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.
WVUE's Public Inspection File can now be accessed online. To access the online public inspection file click here: https://stations.fcc.gov/station-profile/wvue-dt.