T. Boone Pickens

[Editor's note: This story previously ran on HartEnergy.com. A version of this story also appears in the October 2019 edition of Oil and Gas Investor. Subscribe to the magazine here.]

T. Boone Pickens, the billionaire oilman and hedge fund owner, philanthropist and corporate raider, who touted the Pickens Plan for U.S. energy independence and cleaner energy from natural gas, passed away at age 91 on Sept. 11.

In his 2008 autobiography, “The First Billion is the Hardest,” he wrote: “Engagement. Involvement. Constant action. That’s the way to live your life.” And he followed that credo well into his 80s, working out every morning with a trainer and bragging about how much he could bench press. He was a frequent speaker on TV and at various energy industry forums.

Pickens was born in Holdenville, Okla., in 1928; his father was a petroleum landman. He was an entrepreneur early on, selling newspapers as a kid.

Pickens graduated with a geology degree in 1951 from what is now Oklahoma State University, where the football stadium and a geology building bear his name. He donated an estimated $500 million to the school over the years, as well as to many other charities, including M.D. Anderson Cancer Center in Houston, where a tower also bears his name. He used to joke that he had given away a billion dollars but also had lost a billion during his lifetime, given that he was an active commodities trader subject to the ups and downs of the oil and gas business. He had signed Warren Buffet’s Giving Pledge.

Always independent and creative in thought, after two years working at Phillips Petroleum Co., he left in 1956 to found Mesa Petroleum Inc. in Amarillo, Texas. It grew to become a large natural gas producer based in Dallas that was active in the Texas Panhandle and several other states, including the huge Hugoton gas field in Kansas, and in Canada. He also drilled in the U.K. North Sea, discovering Beatrice Field in 1976, the company’s largest find at the time.

From 1973 to 1981, Mesa was one of the largest independents in the world, at one time having $2 billion of assets. But ultimately, after years of growth through drilling and corporate acquisitions, (often of companies more than twice the size of Mesa), his company was stung by high debt and stubbornly low gas prices.

In August 1997, after negotiations with large shareholders, Mesa was merged with Parker & Parsley Petroleum Co. in Midland to form what is today Pioneer Natural Resources Co., becoming the third largest independent in the U.S. at that time. The deal combined Mesa’s natural gas focus with Parker & Parsley’s oil focus in the Midland Basin.

“For three years I had the honor to have Boone as a member of our board of directors. He was a great mentor,” Pioneer CEO Scott Sheffield told Hart Energy upon learning of Pickens’ death.

“He told me … he did not like the Permian’s Spraberry-Wolfcamp Field. However, he later confided in me that he was wrong. Over time he became a large Pioneer shareholder, and the Permian Basin has become the largest oil field in the world.”

Pickens touted natural gas throughout his career, being one of the early chairs of the Natural Gas Vehicle Coalition. He co-founded Clean Energy Fuels Corp., which went public in 1970, selling natural gas and operating hundreds of natural gas fueling stations across the U.S. Pickens served on its board for 20 years.

Andrew J. Littlefair, co-founder, president and CEO, issued a statement, saying: “Words cannot express the sadness the Clean Energy family and myself feel at the loss of our co-founder, leader and friend. I worked closely with Boone for 32 years, and he became a father-like figure and true mentor to me.

“We will miss his devotion, humor, generosity and most of all, love.”

Raids and returns

Pickens was well known in oil and gas circles but he burst on the national scene in the 1980s, even making the cover of TIME in March 1985, when his actions and that of fellow investors such as Carl Icahn heralded the age of the corporate raider—and the beginning of shareholder activism. Today we live in a time of intensifying shareholder activism, but Pickens was a precursor. He was the person who, more than any other in the 1980s, made oil company executives think twice about shareholder value.

He formed the United Shareholders Association in 1986 and spoke out about corporate governance and shareholder returns. Partly because of these efforts, in July 1998 the SEC approved the one-share, one-vote rule, one of Pickens’ goals.

Several corporate consolidations swept the oil and gas industry at that time, and some were instigated by him. Pickens and an investor group would buy enough stock in an oil company target to have a voice, and then he used it, pressuring executives to create value by mergers—or he would try to buy the company himself, through Mesa. Often these attempts failed, but not before the target’s stock price rose, making Pickens a lot of money.

It was called “greenmail” and many in the industry resented him for it. His attempt to take over Gulf Oil Co. of Pittsburgh in 1983 led to Gulf being acquired by Union Oil of California in 1984, becoming what is now Chevron—the largest oil company merger of the 1980s. Pickens’ investor group made $760 million on the merger.

Ironically, in 1984-85, his Mesa Petroleum made a run at Phillips Petroleum Co., Pickens’ first employer out of OSU. The deal was rebuffed after an intense outcry, but Pickens made money anyway as the stock rose.

“Boone understood that companies are owned by their shareholders. Of course, everyone recognizes that today, but not many CEOs gave that notion more than lip service in the ’80s,” Bernard J. Picchi told Hart Energy. Picchi was one of the top award-winning E&P analysts on Wall Street during that era and manages his own fund today. “But Boone ‘walked the talk’ and put his money where his mouth was—and gave capital the respect it was due. He was an original, and will be remembered by all for many years.”

Pickens was an innovator who loved to take risks and always saw opportunity. He formed one of the first master limited partnerships in the ’80s, Mesa LP, betting that natural gas prices would rise. He was also the father of the modern-day oil and gas royalty trust. More recently, he promoted a water business and a wind farm in the Texas Panhandle. In 2008, Mesa Power LP ordered 667 wind turbines from GE to build what was touted as the largest wind farm in the world. He said at the time that this proposed business would become the biggest deal of his career, bigger than the Gulf Oil deal. Later it was scrapped due to economic challenges and lack of power transmission lines.

He was also the founder and force behind BP Capital Management in Dallas, a hedge fund that won and lost billions making bets on energy commodities. From 2000 to 2007, BP Capital made a total profit of $8 billion.

He was most recently known for the Pickens Plan, a national, multimillion-dollar campaign he unveiled in 2008 to get us off foreign oil, and to urge the U.S. trucking industry to move away from diesel toward natural gas. His large group of online supporters was known as the Pickens Army.

In his 2008 autobiography, he described his career highlights, dares, setbacks and comebacks. It is filled with what he called Booneisms, such as this gem: “When you’re hunting elephants, don’t get distracted chasing rabbits.”

Pickens was married five times and had five children.