T. Boone Pickens

• Born: May 22, 1928
• Birthplace: Holdenville, Oklahoma
• Died: September 11, 2019
• Place of death: Dallas, Texas

American oil tycoon and financier

After making a fortune with his own oil company, Pickens sought to acquire rival firms, earning a reputation as a tough corporate raider. He has also donated more than $700 million to charity, giving generously to medical institutions, animal rights groups, and institutions of higher learning.

Sources of wealth: Oil; investments

Bequeathal of wealth: Charity; educational institution; medical institution

Early Life

Thomas Boone Pickens Jr. was born in Holdenville, Oklahoma, on May 22, 1928, the only child of Grace Molonson Pickens and Thomas Boone Pickens Sr. Pickens’s father leased petroleum and mineral rights, and his mother was an administrator for the federal agency that rationed goods in the area around Holdenville during World War II. In 1944, the family moved to Amarillo in the Texas Panhandle, where Pickens graduated from high school. Upon graduation, he attended Texas A&M University on a basketball scholarship for a year before transferring to Oklahoma A&M College (now Oklahoma State University), from which he graduated in 1951 with a degree in geology. In 1949, he married his high school sweetheart, Lynn O’Brien. The couple’s first child, Deborah, was born within a year of their marriage. Eventually the couple had three more children, Pam, Mike, and Thomas Boone III.

First Ventures

After graduating from college, Pickens worked for a time in an oil refinery and as a roughneck in the oil fields before landing a job as a geologist with Phillips Petroleum Company. He worked for Phillips for three years, gaining practical experience in most phases of the oil business.

In 1954, with high hopes and $2,500 of borrowed money, Pickens and two partners, Eugene McCartt and John O’Brien (his wife’s uncle), formed an oil and gas firm named Petroleum Exploration, Inc. Pickens held half interest in the company, while his two partners each had a one-quarter interest. Initially the firm made money by selling oil leases that Pickens had discovered and retaining a percentage of the profits made by these leases during their first few years of oil production. Pickens’s success attracted a group of investors from Amarillo whose money permitted Pickens to drill his own wells. In 1959, Pickens formed the Altair Oil and Gas Company to look for sources of energy in Canada. By 1962, his companies had drilled ninety-eight productive wells and made more than $760,000 in profits.

Mature Wealth

In 1963, Pickens bought out McCartt, and the following year he established Mesa Petroleum Co. by combining the assets of the original Petroleum Exploration, Inc., with those of Altair. In its first year of operation, Mesa produced revenues of $1.5 million, and by 1968 the company had revenues of $6.2 million and profits of $1.4 million.

Pickens then began the activities that later made him famous (or infamous)—the acquisition of other oil companies. In 1968, he tried to acquire the Hugoton gas field in southwestern Kansas. Hugoton resisted the efforts of the much smaller Mesa Petroleum to obtain its assets, but Pickens persisted and in 1969 acquired enough shares of Hugoton to complete his takeover. The acquisition of Hugoton’s assets gave Pickens the capital he needed to complete other deals, and he shortly diversified through the purchase of cattle feeding operations and cattle in Texas. Mesa also began offshore exploration in the North Sea.

Pickens and his wife divorced in 1971, and a year later he married Beatrice “Bea” Carr Stuart, a divorcée who had four children of her own. According to his autobiography, Bea played an important role in Pickens’s subsequent business career. Pickens acquired more oil companies, and in 1972 Mesa reported more than $90 million in total revenues and $15 million in profits. In 1976, Mesa discovered the largest oil field in its history in the North Sea, and this field earned the company more than $31 million in profits. By 1981, Mesa’s assets had grown to more than $2 billion, making it one of the largest independent oil companies in the world.

After 1981, Pickens became more of a financier than an oilman, embarking on a career that some have called “corporate raiding.” He launched several efforts to take over oil companies that were often much larger than his own. His acquisition targets included Cities Service, Superior Oil, and General American Oil of Texas. None of these acquisition efforts succeeded, but Pickens’s attempted takeovers drove up the price of the target companies’ stocks, which made him and other investors a great deal of money. Pickens saw himself as an advocate for stockholders rather than as a corporate raider, targeting companies he felt were mismanaged by their own executives.

Pickens then turned his attention to Gulf Oil, the sixth-largest oil company in the United States. Pickens was convinced that Gulf needed to be restructured, and to accomplish this he formed the Gulf Investment Group, which eventually acquired 11 percent of Gulf’s stock. The subsequent battle between Pickens and Gulf Oil garnered great media attention. Although Pickens lost the ensuing proxy battle, his Gulf Investment Group netted more than $750 million in profits when Standard Oil of California bought Gulf Oil in 1983. Over the next few years, Pickens attempted to take over other oil companies, including Phillips Petroleum Company and Unocal. Although these attempts did not succeed, Pickens made millions of dollars in profits. In 1986, he formed the United Stockholders’ Association, a nonprofit organization to defend shareholders’ rights.

Pickens’s popularity and notoriety began to diminish during the late 1980s. In 1996, he resigned as Mesa’s chairman after presiding over the company’s increasing debt buildup. He and his second wife divorced at about the same time. Seemingly defeated both financially and personally, the then-sixty-eight-year-old Pickens rebounded. In 1997, he founded BP Energy Fund, which ran two hedge funds, Capital Commodity and Capital Equity, both of which invested in energy companies. In the same year, he formed Pickens Fuel Corporation and began extolling the virtues of natural gas as the best substitute for gasoline as a fuel for vehicles. In 2005, he married his third wife, Madeleine Paulson, a widow who was an activist on behalf of wild mustangs. Pickens earned more than $1 billion from the two hedge funds in 2006 and more than $2.5 billion the following year. He began acquiring subsurface water rights in Texas in 2006.

In 2008, Pickens proposed the so-called Pickens Plan, which promotes alternatives to petroleum as a source of energy, advocating the use of natural gas and wind and solar power. One of the plan’s major features was a proposal to replace the electricity generated in the United States by natural gas with wind energy, which would enable natural gas to replace gasoline as the primary fuel for vehicles. For various reasons, the plan has met with considerable opposition.

By 2011, because of the mixed views of the Pickens Plan as well as the drop in the price of oil, the plan had significantly faded from headlines and needed to be reworked. That year, at least one portion of the revised plan, focused on energy and transportation, received a high-profile endorsement from President Barack Obama, who announced that he supported the idea of using natural gas in heavy-duty vehicles instead of oil. Continuing his advocacy for the Pickens Plan and converting US dependency on oil to natural gas, in a 2015 article for Time magazine, Pickens wrote about the need for the United States to lessen its dependence on oil from the Middle East as another means of fighting terrorist groups such as the Islamic State of Iraq and Syria on behalf of national security.

After suffering a minor stroke at the age of eighty-eight in early 2017, Pickens reportedly returned to work.

Legacy

Pickens has been a generous donor, giving more than $700 million to charity. In May 2006, for example, he contributed $50 million each to the University of Texas M. D. Anderson Cancer Center in Houston and the University of Texas Southwestern Medical Center in Dallas. In December 2005, he donated $165 million to his alma mater, Oklahoma State University, which was subsequently invested in a hedge fund controlled by Pickens’s BP Capital Management company. In 2008, he gave this university another $100 million to finance academic programs, which was to be matched by the state of Oklahoma. The Pickens Plan, if implemented, could help eliminate America’s dependence on foreign oil and greatly reduce greenhouse gas emissions, helping to address some of the problems associated with global warming.

Bibliography

Hollandsworth, Skip. “T. Boone Pickens: Man with a Plan.” Saturday Evening Post, 12 Dec. 2008, www.saturdayeveningpost.com/2008/12/12/in-the-magazine/people-and-places/boone-pickens-man-plan.html. Accessed 30 Mar. 2017. Based on lengthy interviews with Pickens, outlines his proposals for U.S. energy independence through the use of alternative energies, especially natural gas and wind power. Strongly suggests that Pickens’s plan has a good chance of success.

Hollandsworth, Skip. “There Will Be Boone” Texas Monthly, Sept. 2008, www.texasmonthly.com/articles/there-will-be-boone/. Accessed 30 Mar. 2017. Deals with Pickens’s plan for solving the energy crisis. Gives a brief account of Pickens’s emergence from near-bankruptcy to once again become fabulously wealthy, then deals at length with his plans for gaining energy independence for the United States through the use of alternative energies.

Nocera, Joe. "How T. Boone Pickens Sits Tight in the Riskiest of Businesses." The New York Times, 12 Nov. 2016, www.nytimes.com/2016/11/13/your-money/t-boone-pickens-risky-business.html. Accessed 30 Mar. 2017.

Pickens, T. Boone. Boone. Houghton Mifflin, 1988. A memoir concentrating on Pickens’s business activities to the late 1980’s. Begins with his wildcatting years in the Texas Panhandle and takes the story through his success with Mesa Petroleum and its explorations in the North Sea.

Pickens, T. Boone. The First Billion Is the Hardest: Reflections on a Life of Comebacks and America’s Energy Future. Crown Business, 2008. More of an analysis of America’s energy problems and what to do about them than an autobiography. Pickens does recount some of his more flamboyant failures and recoveries, but he concentrates on the solutions he proposes for the American and world energy crises.

Pickens, T. Boone. "T. Boone Pickens: Natural Gas Is the Key to Winning the War on Terror." Time, 8 July 2015, time.com/3944889/t-boone-pickens-natural-gas-war-on-terror/. Accessed 30 Mar. 2017.

Yergin, Daniel. The Prize: The Epic Quest for Oil, Money and Power. New ed., Free Press, 2008. A comprehensive history of the oil industry from the drilling of the first well in Pennsylvania to the early twenty-first century. Shows the importance of oil to the world’s economy and details the struggles over control of the commodity. Puts Pickens and his company Mesa Petroleum into the perspective of the world economy.