T Boone Pickens: the maverick who shook up Big Oil

T Boone Pickens © Daniel Acker/Bloomberg via Getty Images
T Boone Pickens: “the first billion is the hardest”

T Boone Pickens, who died recently aged 91, was a shareholder activist before it was cool and made billions of dollars in the oil trade before becoming an unlikely proponent of green energy.

A billionaire who made his fortune from oil, only to become a firm advocate of natural gas and wind power, T. Boone Pickens was “a maverick until the end”, says Katie Mehnert for CNN Business. The “pioneering oil tycoon”, who was also a foundational figure in the rise of modern shareholder activism, died last week at the age of 91 in Dallas, Texas.

Back in the 1980s “shareholder activists” were known by a different name, says Joe Nocera on Bloomberg. Men like Pickens who launched hostile takeover bids were dubbed “corporate raiders”. Some investment banks refused to advise anyone doing it and CEOs thought it terribly impolite to “buy a company that didn’t want to be bought”. As Pickens wrote in a 2017 Forbes column, “the notion that shareholders own the companies and managements were employees was foreign to big oil companies”, which preferred to “operate like empires… I was a disrupter before disrupters were cool”.

A life devoted to risk

The son of an Oklahoman “landman” – someone who gambles on mineral rights – Pickens soon followed his father into the oil game. After obtaining a degree in geology, he established Mesa Petroleum in 1956 with $2,500. So began a career as a “wildcatter”; Pickens became one of the thousands who drove “around the oil states, using public phone booths as their offices… getting a crew together” to drill for oil and dreaming of hitting the big time, says Daniel Yergin in his book The Prize: The Epic Quest for Oil, Money & Power, quoted by CNBC.

Yet Pickens learnt that the best means to strike it rich was “prospecting via merger”, says Chris Power in The Washington Post. Between 1983 and 1985 he launched “three of the most daring takeover bids in US corporate history”, pursuing Gulf, Phillips Petroleum and Unocal Corp, oil behemoths far larger than Mesa. Although the bids didn’t come off, Pickens and his fellow raiders earnt hundreds of millions of dollars because management were willing to pay a premium to buy back the stock and keep control of the business, a practice derided by some as “greenmailing”.

The efforts of Pickens and other raiders “helped profoundly change American corporations by forcing management to acknowledge the supremacy of the shareholder”, says Jonathan Kandell in The New York Times. Yet it also laid the groundwork for the modern “obsession with ever-higher share prices” and short-termism.

The oil man goes green

After a difficult period in the 1990s, Pickens reinvented himself as an unlikely proponent of green energy. He invested heavily in a wind farm in Texas and spent $100m of his own money on a campaign for Americans to wean themselves off foreign oil and strive for energy independence.

Always flamboyant and fond of the spotlight – he was an avid Twitter user known for his “Boone-isms”, quipping that “a fool with a plan can beat a genius with no plan” and that “the first billion is the hardest” – Pickens delighted in shocking journalists. On a tour of his Texan ranch, he would suddenly unleash a volley of blasts from his shotgun. Yet he also had a sentimental side, buying up his childhood home and rebuilding it on his Texas estate.

His bets on renewable energy proved ahead of their time, but his fortune fluctuated wildly over the years, hitting a high of $4bn and falling as low as $500m in 2016, according to Forbes. The one-time oil prospector remained eternally optimistic, says Power. In 2014, after he fell off the Forbes rich list, he told a reporter that “I know I can make it all back – if I have enough time”.