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#427 How Raymond Plank Built a $50 Billion Oil Company
Brief
Raymond Plank’s memoir, as narrated and analyzed on the podcast, traces a 90‑year arc from farmboy entrepreneur to the founder of Apache Corporation and a $50 billion market presence by mid‑2008. The host stresses that the book functions largely as a decades‑long diary of principles: Plank wrote daily for roughly 60 years, distilled enduring maxims (about courage, ego, cost discipline and long time horizons), and repeatedly returned to two operational tenets—extreme cost control and the belief that Apache could “do more with less.” Those habits were formed early: selling eggs and syrup on a Minnesota farm, absorbing financial conservatism from a father who lost wealth in the Great Depression, and surviving WWII as a bomber pilot (40 missions; squadron shot up on 19), which hardened his appetite for risk and long‑term ventures.
The podcast follows Plank’s business arc in detail. Postwar tax policy and drilling incentives created the initial market: Plank leveraged accounting work for oil investors into tax‑efficient drilling partnerships that made rich, highly taxed investors financiers of Apache’s early wells. The host reads Plank’s numerical example: a $200,000 commitment produced an 80% immediate deduction and, with wartime‑era top tax rates above 90% plus a 27.5% depletion allowance on royalties, dramatically lowered investor downside and eased Apache’s capital raising. Organizational tensions punctuated the story—co‑founder Truman Anderson’s ambition and eventual office bugging ended in his expulsion—while Plank’s willingness to change course defined his strategy: he built a 1960s conglomerate (≈58 acquisitions across phones, plastics, ranching, etc.) to smooth oil cyclicality, later sold those businesses and refocused on oil. That flexibility paid off years later when technological advances in drilling re‑valued Apache’s decades‑old holdings. Throughout the memoir Plank mixes candid personal trade‑offs (choosing work over family), leadership practices (daily reports to the board, keeping competitors’ annuals on his office wall), and actionable maxims — the podcast host compares his relentlessness and opportunism to Rockefeller and highlights the memoir as a compendium of entrepreneurial rules rather than a straight company history.
Why it matters
Raymond Plank founded Apache Corporation in 1954 with $250,000; by mid-2008 those assets had grown into a company valued at about $50 billion (source: Plank's memoir, read on the podcast).
Key details
- Plank kept a daily diary for roughly 60 years and used it as a running playbook of maxims and decisions — the podcast host highlights this as the book’s core value rather than just company history.
- Plank converted tax and accounting work for Minneapolis oil investors into Apache’s initial product: tax-efficient drilling partnerships. Example in the book: a $200,000 investor got an immediate 80% deduction ($160,000); with top post‑WWII tax rates above 90% that could reduce tax liability by ~$144,000, lowering the investor’s out‑of‑pocket cost to about $56,000; later royalty income benefited from a 27.5% percentage depletion allowance (Plank’s calculations recounted by the host).
- Plank’s WWII service shaped his risk tolerance: he flew 40 missions as a four‑engine bomber pilot and reported his squadron was shot up on 19 missions (Plank quoted in the memoir).
- Early operational tenets at Apache: intense cost discipline and doing more with less (motto repeated: “How good is our latest discovery? It’s better than it is.”). Early hires in 1954 included a geologist, a landman and an executive assistant (Plank, as recounted by the host).
- Corporate drama and strategic shifts: co‑founder Truman Anderson was expelled after espionage (bugging offices) amid a bitter split over values and time horizons; Apache diversified aggressively in the 1960s (acquiring ~58 companies across sectors) then reconcentrated on oil when conditions turned — a move that paid off decades later when new drilling technology boosted the value of assets bought 1970–1977 (Plank’s memoir, summarized by the host).