David Martin Phillip, of Karnes City, stands outside one of the four radio stations he bought with money he earned from the Texas oil boom. Phillip, like others, is investing the oil money conservatively in the event the boom goes bust. (Photo: Rick Jervis, USA TODAY)

KARNES CITY, Texas — The recent steep drop in crude oil prices may be spooking financial markets and brokers around the world.

But David Martin Phillip isn’t rattled one bit. The 64-year-old real estate developer and entrepreneur struck it rich recently during the oil boom that shook this South Texas community. Royalty checks totaling several million dollars arrive each month in his mailbox from oil companies drilling on his land.

The slump in oil prices has taken a bite out of some of those checks. The price of benchmark West Texas Intermediate crude ended Friday to $81.01 a barrel after dropping to $80.49 earlier in the week, a price not seen since June 2012.

But Phillip and others like him across Texas reaping from the oil boom aren’t too worried about the fluctuating prices — at least not yet.

It’s always been up and down, up and down, Phillip said. There’s no panic in the streets yet.

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The USA is still in the grip of one of its biggest oil booms in generations and is one of the top producers in the world with more than 11 million barrels of oil a day. That boom is driven in large part by soaring extractions in Texas: the Permian Basin in West Texas and the Eagle Ford formation in South Texas. Texas production topped 3 million barrels a day this year for the first time since the late 1970s, according to the Energy Information Administration.

Technological advances in drilling such as hydraulic fracturing — or fracking — and horizontal drilling have unlocked massive reserves of crude and natural gas tucked into hard-to-reach shale rock formations and made overnight millionaires of thousands of residents. Last year, drilling in the Eagle Ford Shale had an $87 billion economic impact and employed 155,000 people in the 21 counties around the formation, according to a recent study by the Institute for Economic Development at the University of Texas-San Antonio.

Nationally, the energy boom unleashed by fracking in 2012 led to 2.1 million jobs, generated nearly $75 billion in federal and state tax revenues, and contributed $283 billion to the U.S. GDP, according to a report last year by IHS, a research and consultancy firm. By 2020, this will grow to 3.3 million jobs, more than $125 billion in tax revenue, and more than $468 billion in GDP, it said.

A steep drop in crude prices could threaten to darken those good times, as oil producers traditionally scale back exploration and production as prices tumble.

But the new technology, though expensive — wells could cost between $5 million and $10 million to drill — is also helping producers be somewhat resilient to fluctuations in prices, said David Vaucher, an IHS senior manager.

The technology allows for strategies, such as grouping wells closer together in a technique known as downspacing or inserting multiple horizontal connections in one well, that could help companies weather the drop in prices, he said.

The break even price in the U.S. for most shale oil producers — or the point where it’s no longer feasible for companies to launch new drilling projects — ranges from about $55 to $70 per barrel, according to various analyses.

Even if prices reach those lows, it would impact mostly new drilling, not existing wells, said Thomas Tunstall. research director at University of Texas-San Antonio’s Institute for Economic Development. There are about 9,000 wells currently in the Eagle Ford shale, with another 17,000 expected to come online in the near future, he said.

A slowdown would be a more realistic scenario than an outright bust, Tunstall said. They wouldn’t just stop drilling across the board.

For David Arrington, a Midland oil executive investing heavily in the Permian Basin, dropping crude prices has been a hot topic of conversation around town but no reason to panic or slow down. His company, Arrington Oil and Gas Operating, is currently running 50 wells and developing 200 more. Arrington has employed what’s known as a hedge to lock in future selling prices that will allow him to drill for the foreseeable future, regardless of crude prices, he said.

We haven’t picked up the accelerator, Arrington said. We’re going at same pace we’ve been going for the past four or five years.

Texans have learned to navigate the fickle terrain of oil booms from past busts, including the massive collapse of the 1980s that sent crude prices plunging to under $10 a barrel, wiped out wealth overnight and bankrupted towns across Texas. A popular bumper sticker at the time read: Please God, send me one more oil boom. This time I promise not to blow it.

In Karnes City, the epicenter of the Eagle Ford boom, city leaders have reinvested the new oil money into repaving roads battered by oil trucks and water management strategies. They’re also planning a new convention center, 1,000-room hotel and a longhorn steer museum to draw visitors, city manager Don Tymrak said. The city’s tax revenue jumped from $168,000 in 2005 to nearly $1 million last year.

It could stop at any moment, Tymrak said of the cash influx. We’re trying to plan for post-Eagle Ford shale.

Few people know the perils of the oil business more intimately than Phillip, the real estate developer. In the 1980s, he lost more than 50 wells and a large chunk of his wealth to the oil bust. It was blood in the streets, he said. I had many, many sleepless nights in the 1980s.

When money from the recent boom began flowing in, Phillip paid off all his debts and bought four radio stations and a restaurant, among other investments. Many of his newly-enriched neighbors did the same, he said, buying everything in cash and wiping out debt — knowing this type of wealth vanishes as fast as it arrives.

It’s a hands-on type of investor you have down here, Phillip said. We all keep our money and investments close to the chest.