It wasn't long before Magic City made the riskier decision to take a shot at top-level horses. Their big break came when they were introduced to trainer Ken McPeek, and together they bought a $100,000 horse named Golden Ticket.
As it turned out, they had a pretty good horse. Golden Ticket ended up surprising many by finishing first in the Travers Stakes at Saratoga and helped put Magic City on the radar of the racing industry.
The year after purchasing their real-life "golden ticket," the duo jumped in and bought a two-year-old horse for $50,000. The new thoroughbred had good bloodlines and was the son of 2007 Kentucky Derby runner Scat Daddy.
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It was only natural then for their new horse to be named Frac Daddy to create a connection to the industry in which they made their lifetime living from.
"We kind of made this horse a tribute to all the oil field workers of America, and in particular the Williston Basin," Stewart proudly stated.
Frac Daddy's run to Kentucky was only secured after a last-minute decision to run in the Arkansas Derby. The horse finished a surprising second, and generated enough points to qualify for the Derby field.
Considered a true long-shot (initially listed at 50-1 odds), Frac Daddy's owners are hoping they can carry the momentum of a strong finish in Arkansas to the winners circle at Churchill Downs.
Despite not having won a big race yet, Carter Stewart remains optimistic. Frac Daddy is "definitely maturing," said Stewart, "and [trainer] Ken McPeek said he's not the same horse he was in Arkansas."
Sports fans typically love a good underdog story. With Frac Daddy and the Magic City ownership team emerging out of nowhere, they appear to be building a large contingent of fans especially from hometown Montana.
"We have the whole state watching and pulling for us," according to Stewart. "Everybody is rallying behind us, and it's fabulous to represent those people."
While the Derby is famous for mint juleps, it turns out Frac Daddy appears to have an affinity for Guinness beer and peppermints. In fact, on Frac Daddy's Facebook page it lists both items as "personal interests."
For co-owner Ken Schlenker who also runs a micro-brewery in Billings, the business will be unveiling a new Uberbrew Frac Daddy Beer IPA this weekend in a salute to their Derby horse.
(Read More: Got $1,000? Mint Juleps Can Be Costly Kentucky Derby Classic)
While some in the racing industry may be more concerned about generating a profit off of their thoroughbred portfolios, Carter Stewart is focused more on the fun and new experiences that come along with the horse racing scene.
"It gives us a chance to get our mind off the oil business and then on to something we'll just have a ball with," said Stewart.
For these two Montana oilmen who happen to also now be horsemen, their dream of being on the big stage at the Kentucky Derby is finally set to be fulfilled.
—By CNBC's Brian Beers. Follow him on Twitter