Over the past six decades, Autry Stephens has worn nearly every hat in the oil industry, from trucker to driller to engineer.
Now he’s poised to don the crown of America’s richest oil tycoon.
On Monday Diamondback Energy Inc. agreed to buy Stephens’s Endeavor Energy Resources LP for $26 billion in cash and stock. The sale would vault Stephens to 64th place from 130th on the Bloomberg Billionaires Index of the world’s richest people, making him the wealthiest oil driller in the country with a net worth of $25.9 billion based on the current Diamondback share price.
A fortune 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’s worth $17 billion. Charles and Julia Koch, owners of conglomerate Koch Industries are richer, though oil makes up just a portion of their diversified fortune.
The Endeavor sale is expected to be completed in the fourth quarter.
The deal ends years of speculation over who might buy Endeavor, one of the last remaining closely held, major 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 stints with the Army Corps of Engineers and a Midland bank as an oil-and-gas appraiser.
At first his nascent business focused on providing ad-hoc engineering help. It expanded over time to include trucking, well services and roustabout construction. One constant was buying drilling rights in Texas and never selling. Stephens bought his first Permian rights shortly after leaving the bank and continued even as production declined through 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 oil demand and bankrupted some US operators. Stephens was forced to shut down almost all of his rigs. The strategy paid off when oil rebounded to more than $100 a barrel soon after.
But it was the advancement of horizontal drilling and hydraulic fracturing that revolutionized the fortunes of the US oil industry — and few were better placed to benefit than Stephens. He eventually assembled drilling rights to 344,000 acres, about 400 times the size of Central Park, in the core of the Permian…