How Did New Drilling Methods Revive Apache's Old Wells?

David Senra says Apache's old oil wells paid off decades later because people outside the company invented drilling techniques that made land Raymond Plank bought start producing again. Plank was not emotionally attached to earlier decisions. When oil opportunities improved, Plank sold virtually everything else and returned Apache to a focused energy company, and almost four decades later Plank was still reaping the benefits.

In 2011 Plank got a report on wells on land bought for Apache between 1970 and 1977. Apache had thought the company had already taken everything the land could give. New drilling methods, invented outside Apache, made wells held for 40 years start yielding great results. Staying in the game long enough, with a long-term view, let somebody else invent technology that made the assets more valuable.

The same pattern shows up with Rockefeller and with Disney's film library. Rockefeller kept an equity interest in Standard Oil. Henry Ford came along 15 years later and figured out how to mass-produce the automobile, which greatly increased demand for oil while Rockefeller still owned the interest. Steve Jobs, studying the animation industry while trying to build Pixar, saw Snow White come out 40 years earlier and drop 250 million to Disney's bottom line after a release on VHS or DVD, and the 250 million in revenue was basically all profit.