Peter Dea
Editor’s note: This profile is part of Hart Energy’s Hall of Fame series honoring industry pioneers and the Agents of Change (ACEs) who are leading the energy sector into the future.
A job in Exxon’s production department is a fairly typical start in the petrochemical industry.
Peter Dea’s path to that first job in the early 1980s, however, was not typical.
After earning his master’s degree in geology at the University of Montana in 1981, Dea spent his time in mineral exploration, land-use studies and teaching. “All kinds of different things,” he said.
Then, he and some friends spent a month as the first skiers to completely traverse Canada’s Mount Logan, the country’s highest peak (19,850 ft). He followed the trip with a few weeks in Anchorage, Alaska, recovering from frostbite. Then, he and friends spent 42 days on a multimodal expedition climbing, hiking and kayaking across the Arctic National Wildlife Refuge.
After that, he was off to Exxon, where he started work in a windowless office in sun-blasted Corpus Christi, Texas.
“It was a bit of a rough transition,”
he said.
Dea, however, made it work. He pursued sailing, triathlons and used his education and growing job skills to help him learn the industry and climb the ladder in the energy business.
The longtime oil and gas executive, who has led some of the most successful deals in the industry, says a key to his career was applying the lessons he learned from his passions to his job.
“I’ve given, over the years, leadership talks, and one thing I always encourage people to do is to pursue their passions, whatever they are,” he said. “Whether it’s piano, golf, skiing or soccer, etc., they all are building one’s character, and they involve discipline, organization, leadership, teamwork and confidence building—all helpful in careers.”
Dea enjoyed his time at Exxon, but his independent streak eventually led him toward the smaller businesses working in the undeveloped spaces, where he felt like he could have a larger effect on a company’s overall success.
His connections brought him to Barrett Resources in 1993. Bill Barrett, the company’s founder, and Paul Rady, head of exploration, recruited Dea because of his geologic knowledge of the Rockies, where the company was based.
At the time, Barrett was focused on exploiting the Piceance Basin but also had an eye on expanding into new fields. Dea was one of the lead geologists in Barrett’s exploration group.
The team was looking for potential prospects to explore when Cave Gulch came up.
“It was literally on the shelf in the file room,” Dea said.
Dea remapped the prospect and found his boss was willing to drill a shallow wildcat well for natural gas surrounded by dry holes. The discovery was the “best well in the Rockies” that year. That set up a deep test toward 20,000 feet.
The second deep well hit so much overpressured gas that the well blew out. Fortunately, no one was injured and the well was brought under control. It produced 40 MMcf/d for 100 days before the pressure fell off.
It was a huge discovery and company-builder for Barrett. The company’s assets in the Piceance had been collectively producing about 25 MMcf/d, and a single well in the Cave Gulch field produced more than one-and-a-half times that amount for 100 days.
“Cave Gulch was a 50 Bcf prospect that turned into a 500 Bcf accumulation of gas,” Dea said. “So, it was pretty exciting and successful.”
Winning the Shell Game
Dea’s climb at Barrett continued. After finishing the Harvard Business School Advanced Management Program in 1999, he took over as CEO. The company continued its expansion, and inevitably caught the eye of some of larger players in the industry.
One Monday afternoon in 2001, he received a phone call from the CEO of Shell America. Shell wanted to
buy Barrett. Dea responded it wasn’t for sale.
“He said, ‘Well, I want to buy your company, and I’d like to come up and meet you.’ And I said, ‘Well, with all due respect, sir, we do have a board meeting coming up this week and, obviously, this will be added to
our agenda.’”
Shell was not that patient. Two days later, Barrett executives learned from Reuters that Shell was moving forward with a tender offer—27% premium, all cash.
“The complexion of the board meeting changed quite a bit,” Dea said.
Barrett immediately hired a team of advisers, attorneys and public relations experts. While Dea had initially hoped to avoid a sale, he ran into a hard reality of public companies.
“I realized really quickly what they don’t tell you in graduate school or at the Harvard AMP—that you cannot say no to an all-cash high-premium offer,” he said.
Barrett could, however, find a better deal. Dea believed that Shell was undervaluing the company and took Barrett to market, eventually making a deal with The Williams Cos. for a much higher 67% premium.
During his time at Barrett, the company grew in value from
$200 million to $2.8 billion. The Wall Street Journal recognized Barrett for delivering the best 10-year average compounded annual return in a comparison with 33 major oil and gas companies.
And, with Barrett sold, Dea found himself unemployed.
“Of course, in a merger like that, the first one out the door is the CEO,” he said. “So, I took some time with my wife and tried to figure out my next move.”
He didn’t have long to wait. Western Gas Resources, a primarily midstream company that wanted to expand into E&P, hired Dea as CEO. The company’s value jumped from $1 billion to
$5.3 billion within five years, when Anadarko Petroleum bought the company in 2006 in an amicable process, as opposed to Shell’s hostile takeover attempt at Barrett.
The Sell-Out Strategy
At that point, Dea decided to follow his passion for exploration and founded private Cirque Resources in 2007. The new company was dedicated to generating prospects and selling an interest to partners to spread risk. The company would then drill wells, prove up the value and sell out. Cirque focused in the Rockies, where the team had the
most experience.
“One of the reasons we went private is because, in the past, I had been running two public companies with the aspiration that we would grow these into the indefinite future,” he said. “And yet, they got bought out from underneath us.
“I figured, why don’t we start a company where the strategy is to
sell out?”
Dea drew investment from several large insurance companies that tended to invest in public companies, a sign of their faith in his plan. Cirque’s last asset was sold in the mid-2010s, after which Dea co-founded Confluence Resources in 2016. At that point, he decided to step away from the day-to-day management and took the role as executive chairman, which he holds today.
He otherwise remains busy. He sits on the boards of Ovintiv, Antero Resources and Liberty Energy. He’s active with several civic groups and co-founded the Explorers’ Club (Denver). He’s sponsored geology programs at his alma maters. He was named Wildcatter of the Year in 2010 (Rockies focused) and was inducted into the All-American Wildcatters in 2014.
He, his wife Cathy and their three sons established the Dea Family Foundation to support education, science and conservation efforts. He and Cathy live in Crested Butte, Colo., where skiing is readily available. And he still enjoys a good adventure.
A few years ago, he and Cathy
went to Baffin Island in the Canadian Arctic. They camped on the ice, 6 miles from shore, saw 39 polar bears and observed narwhals swimming and a bowhead whale breaching
the surface.
“We keep our passions active with these trips we love to do together,” Dea said.
—Sandy Segrist, senior editor, gas and midstream