November 12, 2019 Finance and Tech Publication

T. Boone Pickens, the ‘Oracle of Oil’ and billionaire philanthropist, dies at 91

T. Boone Pickens, the wildcatter “Oracle of Oil,” hedge fund founder and philanthropist who rewrote the playbook for corporate raiders, has died. He was 91.

He died Wednesday of natural causes, surrounded by friends and family, spokesman Jay Rosser said.

Pickens had been in declining health, suffering from a series of strokes and a serious fall 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 few months later, he closed his energy hedge fund, BP Capital, to outside investors.

In a career that started with Phillips Petroleum, Pickens later pursued clean energy projects in wind power and natural gas.

He was a big 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 also donated more than $1 billion over the years, including hundreds of millions to his alma mater, Oklahoma State University, which named its renovated football stadium after him.

“T. Boone Pickens became a household name across the country because he was bold, imaginative, and daring,” former Bush said in a statement. “He was successful — and more importantly, he generously shared his success with institutions and communities across Texas and Oklahoma. He loved the outdoors, his country, and his friends and family, and Laura and I send our condolences.”

In another tribute, billionaire investor Carl Icahn recalled Pickens’ charm and wit. In the 1980s, Pickens targeted for takeover Gulf Oil, Unocal and Phillips Petroleum, a company later sought by Icahn. Icahn recounted how Pickens told a major oil company CEO that his earnings were down for 10 years. Revenues were also down for 10 years, as was cash flow. Icahn remembers laughing when Pickens said, “Don’t you think that’s a trend?”

“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,” Icahn told CNBC’s Patti Domm. “He and I agreed on corporate governance … we shared the same values on shareholders’ rights.”

“They grow big personalities in Texas, but none could top Boone,” billionaire investor Warren Buffett told CNBC’s . “I never was with him that it wasn’t fun.”

Thomas Boone Pickens Jr. was born May 22, 1928, in Holdenville, Oklahoma. His father was a “landman,” who sold oil and mineral rights. During World War II, his mother was in charge of rationing in her region as head of the local Office of Price Administration.

As a 12-year-old paperboy, Pickens started out with 28 customers, but by acquiring adjacent routes one at a time he quadrupled his business.

“That was my first introduction to expanding quickly by acquisition — a talent I would perfect in my later years,” he recalled on his website.

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 started working at Phillips Petroleum.

He left three years later to drill wildcat wells, first founding Petroleum Exploration with $2,500 in cash and $100,000 in borrowed money for projects in the Texas Panhandle, and later establishing Altair Oil & Gas for exploration in western Canada. The companies became Mesa Petroleum, which Pickens took public in 1964 and became one of the largest independent oil and gas companies in the United States.

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 book “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 was never the same’

Five years after creating 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. Although Mesa was substantially smaller than Hugoton, Pickens gathered the support of its shareholders by promising greater returns and better management.

During the early 1980s, Pickens took his corporate raider talents to new levels, investing in chunks of undervalued oil companies, trying to take them over and making big profits even if the buyout failed. As described on his website:

“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 accumulating more than 5% of Cities Service stock over the years, Pickens led Mesa’s attempt in 1982 to acquire the much larger oil company. Cities Service counterattacked by trying to acquire Mesa. A wild bidding war ensued, with Occidental Petroleum eventually winning Cities Service for $4 billion. Pickens still reaped $30 million in profit on his shares.

Later, Pickens made similar, but failed, attempts with Phillips Petroleum, Unocal and Gulf Oil. Gulf, one of the “Seven Sister” oil giants, defended itself by turning to Chevron as its “white knight.” Chevron wound up swallowing Gulf for $13.2 billion, but Pickens netted $404 million for Mesa shareholders for their Gulf stake.

Some accused Pickens of being a “greenmailer,” in which an investor purchases large amounts of a company, then launches a takeover to run up the price before bailing out. But Pickens rejected that label. “I never greenmailed anybody,” he said in an interview on his website.

But there was no arguing that Pickens’ takeover tactics made him a bundle. 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 decorated by oil derricks.

Source: Birney Lettick

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 villain in Oliver Stone’s 1987 movie.

As a corporate raider, Pickens was a leader of the budding “shareholders rights” movement. He founded the United Shareholders Association in 1986 to pressure 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 rather than retire, he started a new business, BP Capital Management, a hedge fund focusing on the energy industry. (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 wrote in the Forbes column.

The hedge fund managed billions of dollars for investors until Pickens closed it in January 2018 because of his declining health.

A year after starting the hedge fund, he formed Pickens Fuel Corp. in 1997, promoting natural gas as an alternative to gasoline. In 2007, he spent $100 million of his own money to launch the Pickens Plan, a campaign with the goal of declaring U.S. energy independence.

The same year, the oilman announced plans to build the world’s largest wind farm — 4,000 megawatts — in the Texas Panhandle, but subsequent low natural gas prices helped to derail the plans. He turned his focus to getting Congress to offer incentives for conversion of trucks from diesel to compressed natural gas.

“I’m all American,” Pickens said. “Any energy in America beats importing.”

‘Yes, I’m for Donald Trump’

During Bush’s 2004 re-election campaign, Pickens helped finance the “Swift Boat Veterans for Truth” campaign that questioned John Kerry’s Vietnam War record and helped undermine the Democrat’s presidential bid.

He backed Republican Rudy Giuliani in 2008 and Donald Trump in 2016.

“Yes, I’m for Donald Trump,” Pickens declared in May 2016. “I’m tired of having politicians as president of the U.S. Let’s try something different.”

He supported Trump’s withdrawal from the Paris climate accord and his attempts to restrict visitors from predominantly Muslim countries from entering the United States.

I’d cut off the Muslims from coming into the United States until we can vet these people,” he said. “Cut them off until we can figure out who they are.”

Aside from Republican politics, Pickens was a benefactor of numerous organizations, including the University of Texas Southwestern Medical Center in Dallas and the M.D. Anderson Cancer Center in Houston ($50 million each in 2007). His $165 million donation to his OSU’s athletic department helped fund the stadium renovation. The school named the complex Boone Pickens Stadium to thank him for what it said was the largest single donation ever to any university 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 in the Mesa Vista family chapel. That marriage lasted three years. Pickens’ four previous marriages also ended in divorce. Survivors include three daughters and two sons from previous marriages.

Plans for memorial services in Dallas and Stillwater, Oklahoma, are pending, his website said. The Dallas Morning News said Pickens will be laid to rest at Karsten Creek Golf Club, home to the OSU golf team.

Days after Pickens suffered “a Texas-sized fall” in July 2017, he wrote 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.”

Correction: This story was revised to correct that Pickens and Brinker divorced after three years of marriage.

in Wealth
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