On calls them wildcatters, the “wild cats”. Their boots are muddy and their coats dusty. They started with little, drilling a hole in West Texas. Then oil came out, and they prospered by increasing the drilling. In good years, they earned infinitely more money than the boss of the largest oil company in the United States. While remaining their own boss.
Autry Stephens is of this feline breed. Its original well is called Big Dog. He drilled it near his town of Midland, Texas, in 1979. He built an empire called Endeavor, which made him a multi-billionaire since the boom in shale gas and oil. He will be much more so after the sale, announced Monday February 12, of his company to its competitor Diamondback for nearly 26 billion dollars (24.3 billion euros).
A page is turning in American oil history. Independents with bad tempers are giving way to polite managers employed by large companies listed on the stock exchange. Over the past year, Autry Stephens’ colleagues have been bought out one after the other. The most spectacular operation was the acquisition by the world number one ExxonMobil of Pioneer for nearly $60 billion, in October 2023. According to the Financial Timesnearly $180 billion in acquisitions have been recorded since January 2023.
Rationalization
It must be said that the region of the Permian Sedimentary Basin which extends from west Texas to southeastern New Mexico is the largest shale gas and oil deposit in the world. It is thanks to him that the United States has once again become the world’s leading oil producer, far ahead of Saudi Arabia and Russia. Its mode of production with short-term drilling managed by small, very flexible producers has made it the variable for adjusting global prices of black gold in the face of the Organization of the Petroleum Exporting Countries cartel. The big majors believe that it is time to rationalize all this by taking advantage of the effects of scale.
This rationalization of a poorly regulated universe, the world’s leading emitter of CO₂ due to countless flares and methane leaks, was inevitable. It bears the mark of a new attitude of the big oil companies, faced with the prospect of a medium-term decline in their production and the need to invest in sources of quick-yielding cash to compensate for the increasingly pronounced disinterest of the Stock Exchange for their activity. The “wild cats” will have to find a new playground.