King P. Kirchner co-founded what is now Tulsa-based Unit Corp. and was CEO until he retired in 2001. He still invests in private drilling deals, drawing on what he calls “the dirty glove angle” gleaned from being a roughneck at age 16.

Kirchner was a farm boy in Perry, Oklahoma, who received degrees in mechanical engineering from Oklahoma A&M (now Oklahoma State) and petroleum engineering, with honors, from the University of Oklahoma. In between degrees he was in the U.S. Army in Germany during the Korean War for two years. Once back home, he worked nights on a rig and took classes during the day. “I did my homework on the rig during slow times.”

His first job was at Lufkin Manufacturing in East Texas as a development engineer for hydraulic pumping units. Later, he was a vice president of engineering and operations for Woolaroc Oil Co.

In 1963 he and co-founder Don Bodard invested $10,000 each and borrowed $160,000 to buy three rotary rigs and the Unit Drilling name from Woolaroc. Unit went public in 1979, grew through numerous acquisitions and at one time had 2,800 employees and at its peak, more than 130 rigs. Unit diversified into E&P with interests in more than 8,500 wells from Canada to the Gulf Coast producing 50,000 boe/d. It also owns Superior Pipeline Co. and is building a new headquarters in Tulsa.

A passionate pilot, Kirchner has logged more than 8,000 hours and owned more than 150 airplanes. He owns three today and still flies at age 88—and, still rides his Harley as well.

“What I’ve noticed is that flying, like farming, is a lot of fun and you can make a living at it, but not as much as in the oil and gas business,” he said with a laugh. “As much as I wanted to be a professional pilot, I figured I’d better stick with oil and gas.”

King P. Kirchner

Investor King, what are you up to these days?

Kirchner I’m not there pulling the trigger any more but I listen in on their meetings. I love this company; it’s my baby. I’m so proud of it and the people there—I had to sign over everything I owned to start it so I’m not selling it now [Unit stock].

I retired for about 30 minutes, so now I invest in some oil wells here and there, and I brought my son into it. I would love to invest alongside Unit, but I prefer to steer clear of anything that would look like a conflict of interest, so I’m looking in different areas and investing with people I’ve known for years.

Investor What sort of advice do you draw upon when investing?

Kirchner A geology professor told me years ago at OU that the first rule is, Go where oil and gas have already been found. Also, he said if you can, always invest in deals with other successful oil people on the same basis or terms they do.

Investor How did you get into the energy business?

Kirchner My dad was an oil and gas lease broker part-time to subsidize the farm, and he told me oil and gas was one place where you could not only make a living, you might have a chance to end up wealthy. My father and grandfather advised me not to get into drilling rigs but I went against that advice because I love rigs.

From the time I was a high school boy, my dream was to own my own oil company, so when I was at Woolaroc, I just decided I wanted to be in business for myself. I had no money, no credit ... but I’d sold an airplane recently and used that cash to get into business. With production you don’t get paid for a few months after a well comes in, whereas after you contract drill a well, you get paid for it promptly, so we bought three rigs from Woolaroc ... and opened a one-man office in Tulsa. Everything I owned was pledged to the bank, so failure was not an option.

Investor Today Unit has three legs to the stool: drilling rigs, E&P and midstream. Which do you prefer?

Kirchner All of it. But I love the mechanical stuff and I really thrive on it. And the new technologies that let you drill so much faster—and horizontally—are phenomenal. When times are bad, rigs operate with low or no profit and the stock goes too low, but when times are good, people can’t get enough of them. But I also love the consistency of having cash flow from oil and gas production.

Investor How did you manage drilling challenges?

Kirchner Rigs run 24/7 so I had a phone in my ear day and night. I’d go into the Tulsa office in the morning and many afternoons I’d fly out to one of the rigs—I knew all the employees by name, their wives’ names. I believe in staying close to them. I didn’t lay them off during the bad times—they have to buy groceries too—so I’d keep the rigs going at no profit if I had to. When times were slow, we’d buy rigs for a nickel on the dollar.

Investor How did you survive the downturns?

Kirchner I think there have been 10 or 11 of them … these slumps can last a long time, so that’s why I wanted Unit to have production. Don’t have more debt than you need (personally or in your business); operate lean and mean. When we first started, I always hired the very best people, people smarter than I am, like John Nikkel [Unit’s chairman] and Larry Pinkston [CEO]. They built it bigger than I did. Out in the field we had the best people, the salt of the earth.

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