How Raymond Plank Made a Fortune in Big Oil's Scraps

The transcript provides an extensive discussion of Raymond Plank's memoir, beginning with his formative years and the cornerstones that shaped his values. At age 10, his father imparted the lesson that it's useful to "make a very small difference on behalf of others," a philosophy that recurs throughout his life. His mother's death when he was 15 and his father's financial devastation during the Great Depression instilled in him a deep conservatism about financial management and debt.

Plank's early entrepreneurial ventures—selling eggs, sawing firewood, and producing maple syrup—demonstrated his natural business instincts and self-sufficiency. His World War II experience as a fighter pilot, where he flew 40 combat missions and witnessed friend's deaths, fundamentally shaped his willingness to take calculated risks in business and his philosophy on courage. After the war, recognizing the post-war economic boom opportunity, he started Northwest Business Service providing tax and accounting services to small businesses.

The formation of Apache Corporation in 1954 emerged from his accounting work with oil investors. He identified that wealthy clients were being defrauded by promoters, and when investors asked him to take over management, despite lacking oil and gas expertise, he proceeded anyway. The company's core competitive advantage lay in Plank's superior understanding of tax strategy. He structured drilling investments as tax-efficient vehicles for high-bracket earners, leveraging post-WWII government incentives for domestic oil exploration and the 90%+ tax rates that made oil and gas deductions extremely valuable. Investors could invest $200,000 and receive $160,000 in immediate deductions, reducing their actual cost to roughly $56,000 after taxes, while also participating in upside through depletion allowances on future production.

The early years of Apache were marked by severe conflict with co-founder Truman Anderson, who differed fundamentally on time horizon and values. Anderson wanted quick personal wealth; Plank envisioned long-term business building. This conflict escalated to Anderson bugging the company's offices, an incident Plank viewed as ego exceeding competence. After taking control, Plank implemented daily reporting to the board to build confidence and maintain transparency.

In the late 1950s and 1960s, as oil allowables in Oklahoma and Texas were cut by 90%, Plank diversified Apache into a conglomerate, acquiring 58 businesses across agriculture, plastics, telecommunications, steel, auto parts, and utilities. Critically, unlike other conglomerates of the era, Plank avoided imposing large-company overhead on acquired businesses, instead leaving successful owner-operators to run their operations independently. He orchestrated the acquisition and consolidation of 12 telephone companies for sale to Continental Telephone, though the deal was disrupted when the CEO was killed in a car bombing. When oil market conditions improved in the 1970s, Plank decisively reversed course, divesting the conglomerate to refocus Apache as a pure oil and gas company.

Plank's core business strategy centered on what he termed being "like pigs following cows through a corn field"—acquiring older, marginal oil properties from major integrated oil companies that had divested them in pursuit of larger reserves. Major companies lacked incentive to invest in declining fields, but Plank believed Apache could generate superior returns through focused, cost-conscious management. This counterpositioned strategy—doing the opposite of industry norms—became foundational to Apache's identity.

Throughout his career, Plank emphasized extreme cost discipline and learning through osmosis from domain experts he hired. He kept competitor annual reports pinned to his office wall and approached business with relentless focus. His personal discipline extended to flying his own plane to meetings but charging Apache the equivalent of commercial airfare. He also believed that staying in the game long enough provided exposure to technological advances invented by others that could unlock value in aging assets—a principle vindicated decades later when new drilling techniques made Apache's 40-year-old wells highly profitable again.

The memoir emphasizes Plank's philosophical and maxim-based reflections accumulated over nine decades. He stressed that learning accelerates when knowledge is applied; that those lacking self-respect cannot earn others' respect; that beaten paths are for beaten men; and that one who thinks solely of himself is soon forgotten while those who care for others live on. He candidly acknowledged choosing work over family, resulting in strain on his marriages and children, though he expressed no regret, viewing life as fundamentally about learning and growth.

Plank's story parallels aspects of Rockefeller's biography—particularly low-key relentlessness, constant cost vigilance, personal investment in opportunities to build partner confidence, and an uncanny ability to identify inefficiencies in existing markets. His life exemplifies how not knowing industry conventions can be an advantage, allowing one to develop novel approaches unshackled by established practices.