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Who is Autry Stephens? Endeavor Energy founder became world’s richest oil driller

Autry Stephens

Autry Stephens, CEO of Endeavor Energy Resources LP, sits for a photo in his office in Midland, Texas, U.S., Friday, December 12, 2014. Brittany Sowacke/Bloomberg via Getty Images

Over the past six decades, Autry Stephens has worn almost every hat in the oil industry, from trucker to driller to engineer.

Now he’s set to take on the crown of America’s richest oil tycoon.

On Monday, Diamondback Energy Inc. agreed to buy Endeavor Energy Resources LP from Stephens for $26 billion in cash and stock. The sale would propel Stephens from 130th to 64th place on the Bloomberg Billionaires Index of the world’s richest people, making him the nation’s richest oil driller with a net worth of $25.9 billion on the basis of Diamondback’s current stock price.

A fortune of that size would surpass the net worth of Continental Resources Inc.’s Harold Hamm, at $15.4 billion, and Hilcorp Energy’s Jeff Hildebrand, who is worth $17 billion. Charles and Julia Koch, owners of the Koch Industries conglomerate, are wealthier, even though oil represents only part of their diverse fortune.

The sale of Endeavor is expected to be completed in the fourth quarter.

The deal ends years of speculation over who might buy Endeavor, one of the last major closely held producers in the shale-rich Permian region. The son of peanut and melon farmers, Stephens, 85, founded the Midland, Texas-based company in 1979 after working for Humble Oil, now part of Exxon Mobil Corp., and working for the Army Corps of Engineers and a Midland bank. as an oil and gas appraiser.

At first, his fledgling business focused on providing one-off technical help. It expanded over time to include trucking, well services, and backpacker construction. One constant was buying drilling rights in Texas and never selling them. Stephens purchased his first rights to the Permian shortly after leaving the bank and continued even as production declined during the 1980s and 1990s, when major oil companies left for more lucrative opportunities overseas . Play video

His insistence on using cash rather than debt to acquire drilling rights helped him survive the 2008 financial crisis, which crushed demand for oil and put some U.S. operators out of business. Stephens was forced to close almost all of its facilities. This strategy paid off when oil rebounded to over $100 a barrel shortly thereafter.

But it was advances in horizontal drilling and hydraulic fracturing that revolutionized the fortunes of the American oil industry – and few were better positioned than Stephens to benefit from them. He eventually gathered drilling rights to 344,000 acres, about 400 times the size of Central Park, in the heart of the Permian Basin.

“It’s as good as any acreage in North America,” Kaes Van’t Hof, Diamondback’s chief financial officer, told analysts and investors on a conference call announcing the deal. “Mr. Stephens has been operating leases in this basin for 45 years, and many of those leases were purchased before we even existed at Diamondback.

As the majors returned to the Permian in the 2010s and domestic oil drillers expanded, speculation grew about when Stephens would sell or take Endeavor public. Despite overtures from bankers and potential buyers, he resisted, preferring to increase production himself. Endeavor eventually became “the crown jewel of the Permian Basin’s private companies,” according to John Freeman, a Houston-based analyst at Raymond James Financial Inc.

Those close to Stephens praise his work ethic and commitment to the Permian, even despite the significant oil price drops of 2014 and 2020.

The terms of the sale mean Stephens will keep one foot in the industry he spent his life shaping. After the merger, Stephens and his family – Endeavor’s sole shareholders – will own just under 40% of the combined company. He is also set to receive $8 billion in cash. Stephens’ daughter, Lyndal Greth, an attorney, is vice chair of Endeavour’s board of directors.

After controlling Endeavor for decades, Stephens will not join Diamondback’s board to help run the combined companies, according to a person familiar with the matter. Stephens trusts Lance Robertson and Chuck Meloy — Endeavor’s current and previous CEOs — will join Diamondback’s board, the person said.

Other terms of the deal also comforted Stephens. Endeavor employs 1,200 people and ensuring no layoffs were important to the founder, as was keeping the company in Midland, the person said. The fact that the acquiring company was headquartered across the street, with a boss in Travis Stice, whom Stephens had known for many years, was decisive.

Stephens also saw parallels with corporations: a similar philosophy focused on maintaining a lean staff, efficiently managing operations and improving both the oil industry and the Midland community as a whole.

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