How T. Boone Pickens Built His Empire
December 15, 2013 Leave a comment
How T. Boone Pickens Built His Empire
From lawn mower to oil tycoon and multi-billionaire, T. Boone Pickens on his biggest investment ups and (even bigger) downs
JEN WIECZNER
Dec. 13, 2013 11:23 a.m. ET
Back when he was an oil drill worker in the 1950s, T. Boone Pickens earned just $5,000 annually. Fast-forward about eight IPOs and 15 corporate raids and takeovers later, and the 85-year-old is now worth about $950 million—down from $4 billion before the market collapsed in 2008 and losses in wind-energy investments. But he’s not pinching pennies yet: “I’m back trying to make another billion,” he tells us. Here’s how he did it the first time around.1. At the age of 10 in Oklahoma, agrees to mow his grandma’s lawns but grossly underestimates their size. “It was a very bad deal,” he says, “but she made me stick with it.”
2. Starts delivering newspapers to 28 homes; acquires more routes and reaches 156 houses. “From that point forward, I always had money in my pocket.”
3. Roughnecks on oil rigs (like on right), at age 16. Loses his $25-per-month college basketball scholarship but tutors for $1 an hour (for a C grade) up to $3 (for an A).
4. Works for Phillips Petroleum on wildcat wells but then resigns just a few years later to strike out on his own.
5. Spends $2,500 in 1956 to start what becomes Mesa Petroleum PXD +0.37%(named after Texas area right). But blows two years, and $2 million, on a dry well. “Every loss is a learning experience.”
6. Takes Mesa Petroleum public in 1964, then later merges with Hugoton Production Co., which is 20 times bigger. Runs the ship, but his stake sinks from 23% to 1.5%. “For 20 years, I had no investment other than in the company,” he says. “I bet on myself.”
7. Starts acquisition spree, multiplying his company’s revenues 15-fold, to nearly $200 million in four years, and discovers oil jackpot in the North Sea (right). Withdraws from Mesa, with his $78 million net worth, and founds energy-focused hedge fund BP Capital Management in 1997.
8. Starts donating $1 billion, with some money going to universities (right) and hospitals. Sees wealth peak at about $4 billion in 2007.
9. Loses half of his net worth during the financial crisis—leaving him around $1 billion then. “I always feel like if I made a billion, I’ll make two, three, five, whatever.”
10. To the surprise of some, he becomes a poster boy for alternative energy, championing wind farms over old-fashioned oil. Now argues wind power only works if natural-gas costs soar. Otherwise, he adds, “it puts you out of business.”
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