T. Boone Pickens, the wildcatter “Oracle of Oil,” hedge fund founder and philanthropist who rewrote the playbook for corporate raiders, has expired. He had been 91.
He died Wednesday of natural causes.
Pickens was in declining health, dealing with a series of strokes and a critical drop in 2017. In late 2017, he put his sprawling 100-square-mile Mesa Vista Ranch in the Texas Panhandle on the market for $250 million, and a couple of months later, he shut his energy hedge fund, BP Capital, to external investors.
“I will sorely miss his friendship and his great wit. He was a stand-up guy from the old school. I wish there were more like him today,” stated billionaire investor Carl Icahn. “He and I agreed on corporate governance … we shared the same values on shareholders’ rights.”
Pickens was called a corporate raider in the 1980therefore, targeting Gulf Oil, Unocal and Phillips Petroleum, a company later targeted by Icahn. Icahn explained Pickens’ Texas charm and humor. He recounted how Pickens advised a significant oil company CEO that his earnings were down for 10 years. Revenues were down for 10 years, as was cash flow. Icahn recalls laughing, when Pickens stated “Don’t you think that’s a trend?”
In a career that began with Phillips Petroleum, Pickens later pursued clean energy jobs in wind power and natural gas.
He was a massive Republican political donor, backing George W. Bush in the Texas gubernatorial and presidential races. Guests at his ranch included Dick Cheney and Nancy Reagan.
Boone Pickens quail hunting on Mesa Vista Ranch.
Handout: Mesa Vista Ranch
He donated more than $1 billion over time, including hundreds of millions to his alma mater, Oklahoma State University, which named its renovated football stadium after him.
Thomas Boone Pickens Jr. was born May 22, 1928, in Holdenville, Oklahoma. His dad was a “landman,” who sold oil and mineral rights. During World War II, his mother was in charge of rationing in her area as head of the native Office of Price Administration.
As a 12-year old paperboy, Pickens started out with 28 clients, but by acquiring adjacent paths one at a time he quadrupled his enterprise.
“That was my first introduction to expanding quickly by acquisition — a talent I would perfect in my later years,” he remembered on his site .
His family moved to Amarillo, Texas, where he attended high school. After graduating in 1951 from Oklahoma A&M (now Oklahoma State) with a degree in geology, Pickens began working at Phillips Petroleum.
He left three decades later to drill wildcat wells, first founding Petroleum Exploration with $2,500 in cash and $100,000 in borrowed money for jobs in the Texas Panhandle, and later establishing Altair Oil & Gas for mining in western Canada. The firms became Mesa Petroleum, which Pickens took people in 1964 and became one of the biggest independent oil and gas companies in america.
Boone Pickens, Chairman, BP Capital Management
Adam Jeffery | CNBC
“Pickens was one of thousands driving around the oil states, using public phone booths as their offices, hustling, looking at deals. Selling them, getting a crew together and a well drilled and, if lucky, hitting oil or gas, dreaming all the while of making it big, really big,” Daniel Yergin wrote in his Pulitzer Prize-winning publication “The Prize: The Epic Quest for Oil, Money & Power.”
“Pickens got farther than most. He was smart and shrewd, with an ability to analyze and think through a problem, step by step.”
Corporate raider:’Big Oil wasn’t the same’
Five years after producing Mesa, Pickens targeted Hugoton Production for a hostile takeover, seeing that the value of Hugoton’s extensive gas reserves in Kansas dwarfed its low stock price. Though Mesa was considerably smaller than Hugoton, Pickens gathered the support of its shareholders by promising greater yields and better direction.
Throughout the early 1980therefore, Pickens took his corporate raider talents to new levels, investing in chunks of undervalued oil companies, attempting to take them over and making enormous profits even when the buyout failed. According to his site :
“Pickens and his young band of hungry Mesa Petroleum managers grabbed hold of a monster and shook it like it’d never been jostled before. They rode that monster, and got thrown some, but Big Oil was never the same again.”
After amassing more than 5 percent of Cities Service inventory through time, Pickens led Mesa’s effort in 1982 to obtain the much larger oil firm. Cities Service counterattacked by attempting to acquire Mesa. A crazy bidding war ensued, with Occidental Petroleum finally winning Cities Service for $4 billion. Pickens still reaped $30 million in gain on his stocks.
Afterwards, Pickens produced comparable, but failed, efforts with Phillips Petroleum, Unocal and Gulf Oil. Gulf, one of those “Seven Sister” oil giants, defended itself by turning to Chevron because its “white knight.” Chevron wound up consuming Gulf for $13.2 billion, however Pickens netted $404 million for Mesa shareholders for their Gulf stake.
Some accused Pickens of being a “greenmailer,” where an investor bought large amounts of a business, then launched a takeover to run up the cost before bailing out. But Pickens rejected that tag. “I never greenmailed anyone,” he explained in an interview on his web page.
But there was no arguing that Pickens’ takeover tactics made him a package. They also landed him on the cover of Time magazine. There he was in 1985, sitting behind a pile of poker chips — blue chips — and holding a hand of cards adorned by oil derricks.
“He was Gordon Gekko before’Wall Street,’ and his influence was profound,” The New York Times’ David Gelles wrote in a January 2018 profile, referring to the protagonist in Oliver Stone’s 1987 film.
As a corporate raider, Pickens was a pioneer of this budding “shareholders rights” movement. He founded the United Shareholders Association at 1986 to stress corporate leaders “to give the companies back to the owners, which are the shareholders.”
“I have always believed that maintaining the status quo inevitably leads to failure,” Pickens wrote in a September 2017 column for Forbes. “Back then, the notion that shareholders own the companies and managements were employees was foreign to big oil companies that would rather operate like empires. I was hell-bent on shaking things up. I was a disrupter before disrupters were cool.”
‘Halftime’ at age 68
In 1996, at age 68, Pickens sold Mesa, but instead of retire, he began a new company, BP Capital Management, a hedge fund focusing on the energy market. (BP stands for his name, not British Petroleum.)
T. Boone Pickens, founder and chief executive officer of BP Capital LLC.
Andrew Harrer | Bloomberg | Getty Images
“For most people, that would have been the end. For me, it was halftime,” he composed in the Forbes column.
The hedge fund managed billions of dollars for investors until Pickens shut it in January 2018 due to his declining health.
annually after beginning the hedge fund, he formed Pickens Fuel Corp. in 1997, promoting natural gas as an alternative to petrol. In 2007, he spent 100 million of his own money to establish the Pickens Plan, a campaign with the objective of announcing U.S. energy independence.
The same year, the oilman announced plans to construct that the world’s biggest wind farm — 4,000 megawatts — from the Texas Panhandle, but following low natural gas prices helped to derail the plans. He turned his attention to getting Congress to provide incentives for conversion of trucks from diesel to compressed natural gas.
“I’m all American,” Pickens stated . “Any energy in America beats importing.”
‘Yes, I am for Donald Trump’
Throughout Bush’s 2004 re-election effort, Pickens helped fund the “Swift Boat Veterans for Truth” effort that questioned John Kerry’s Vietnam War record and helped undermine the Democrat’s presidential bid.
He endorsed Republican Rudy Giuliani in 2008 and Donald Trump in 2016.
“Yes, I’m for Donald Trump,” Pickens announced in May 2016. “I’m tired of having politicians as president of the U.S. Let’s try something different.”
He affirmed Trump’s withdrawal from the Paris climate accord and his efforts to restrict people from predominantly Muslim nations from entering the USA.
“I’d cut off the Muslims from coming into the USA till we could vet those people,” he said. “Cut them off until we can figure out who they are.”
Aside from Republican politics, Pickens was a benefactor of numerous associations, including the University of Texas Southwestern Medical Center at Dallas and the M.D. Anderson Cancer Center at Houston ($50 million annually in 2007). His $165 million contribution to his OSU’s athletic department helped finance the stadium renovation. The school called the complicated Boone Pickens Stadium to thank him for what it said was that the largest single contribution ever to any college athletic department.
On Valentine’s Day 2014, the 85-year old Pickens married Toni Brinker, widow of Dallas restaurateur Norman Brinker, in a small ceremony at the Mesa Vista family chapel. His four previous marriages ended in divorce. She survives himas do three daughters and two sons from previous marriages.
Days later Pickens endured “a Texas-sized fall” in July 2017, he composed a LinkedIn post titled”Accepting (or Embracing) Mortality.”
“Now, don’t for a minute think I’m being morbid,” he wrote. “Truth is, when you’re in the oil business like I’ve been all my life, you drill your fair share of dry holes, but you never lose your optimism. There’s a story I tell about the geologist who fell off a 10-story building. When he blew past the fifth floor he thought to himself, ‘So far so good.’ That’s the way to approach life. Be the eternal optimist who is excited to see what the next decade will bring.”