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"The Poster Child Of Too Much Money Chasing Deals"

Tyler Durden's picture




 

Three weeks after the formation of his company which "plans to" (as opposed to "is doing") "buy underdeveloped land and rill shale wells," 27-year-old Mark Hiduke raised $100 million from a local private equity firm. Makes perfect sense of course - especially after Dubai's 31x over-subscribed IPO for a firm with no operations - but perhaps the following sums it all up... "These guys are going to be the poster children of self-made oil and gas tycoons... or they could be the poster children of how too much money is chasing deals." Indeed...

 

As Bloomberg reports,

After years of failing to attract and retain young talent, the industry is suddenly brimming with upstart millennials such as Hiduke—oil and gas veterans call it “the great crew change.” “I’ve never seen an industry do what the oil and gas industry has done in the last 10 years,” says T. Boone Pickens, the 86-year-old oilman. “Ten years ago I could not have made this statement that you have picked the right career.”

 

Hiduke’s company, Dallas-based PetroCore, received the $100 million commitment from a local private equity firm in May. Hiduke and three partners plan to buy underdeveloped land and drill shale wells, he says. The shale boom has “created a lot of opportunity for young professionals to jump in and be given enormous responsibility.”

 

...

 

The ease with which newcomers such as Hiduke raise money could turn out to be a blessing or a curse, according to Nathen McEown, a 33-year-old accountant at Whitley Penn who organizes networking dinners. “These guys are going to be the poster children of self-made oil and gas tycoons,” he says. “Or they could be the poster children of how too much money is chasing deals.”

 

...

 

Since the generational shift coincides with a technological breakthrough, the younger crop knows only the shale boom, and knowledge of conventional drilling might retire with the baby boomers, says Kimberly Lacher, 38, who with Wood Brookshire, 31, runs Vendera Resources. The company has invested more than $50 million in about 1,200 wells. Miller has similar concerns. “What’s going to happen when the older folks retire, we don’t know,” he says. “You’re going to see a lot of volatility. You’re going to see young people making decisions that were handled by predecessors who had more experience.”

Nope, no bubble here...

 

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Fri, 05/23/2014 - 13:34 | 4789156 what's that smell
what's that smell's picture

THE....GREATEST....NATION....IN....THE....HISTORY....OF....THE....UNIVERSE.

Fri, 05/23/2014 - 13:44 | 4789183 Newsboy
Newsboy's picture

Finally, a Ponzi that really MAKES YOU MONEY.

Sign up today!

Fri, 05/23/2014 - 14:15 | 4789287 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Oil is infamous for having big busts during downturns. Take a wild guess what will happen then?

Fri, 05/23/2014 - 13:44 | 4789184 SafelyGraze
SafelyGraze's picture

cnn is all over this story!

in fact, here's a list of the TOP US STORIES that cnn is all over:

http://imgur.com/7YwoheU

for those of you who have forgotten about cnn, it is one of those deprecated 'msm' newsfeeds that old people can follow on their tele-vision machines 

when they are not watching wheel of fortune or jeopardy or the price is right or name that tune

Fri, 05/23/2014 - 14:14 | 4789284 robilla
robilla's picture

Hey! Don't be knocking Jeopardy!

But Tribek is fair game.

Fri, 05/23/2014 - 13:46 | 4789193 DoChenRollingBearing
DoChenRollingBearing's picture

My biggest problem with energy investing is the same reason I don't buy gold mines: risk of .gov tampering (high taxes, stifling regulations, policy changes).  And you cannot buy and store physical crude oil easily and safely either.

Maybe buy the "picks & shovels" suppliers: Schlumberger for example.

Or just buy gold.

Fri, 05/23/2014 - 14:20 | 4789298 Canadian Dirtlump
Canadian Dirtlump's picture

I shared a story my ceo told me on peak prosperity and I'll echo it here. 3 wells in my area ( cardiem, alberta ) were just drilled by 3 different established companies. All 3 could not complete the horizontal leg ( critical to maximize prodution ) because the formation was too tight. All 3 did multi stage fracs and all 3 ended up having multiple of the fracs not be successful. They are producing but not what they theoretically should. This is in an area which is well established with many good wells.THe point?

 

Tight oil has been remarkable but we're seeing more of the above and if you have some noobs who show up out of the blue to try to become the beverly hillbillies and not poach some real talent they could easily run into a brick wall. 1 local upstart drilled 3 dusters and now they and their investors have exactly zero point zero to show for their investment.

Fri, 05/23/2014 - 13:35 | 4789159 klinko
klinko's picture

where do I apply?

Fri, 05/23/2014 - 13:36 | 4789163 Ozy_mandias
Ozy_mandias's picture

"Drill" shale wells. Rilling isnt a thing....yet

Fri, 05/23/2014 - 13:41 | 4789175 astoriajoe
astoriajoe's picture

please don't give away my business plan.

Fri, 05/23/2014 - 13:37 | 4789167 Spitzer
Spitzer's picture

FOFOA

Have you noticed how many people think they are traders and investors these days? And with all the options to invest in and trade out there, who can blame them? But in reality they are not traders or investors. They are doctors, lawyers, businessmen… and savers. What we call investing today is more like speculating. So why do we "save" the way we do today, by speculating on things we know so little about?

 

Today's savers have given their savings to every manner of counterparty who went on a spending spree, leaving only the illusion of a debt that is too big to even be serviced in real terms. We have spent the last 35 years exploring the Milky Way galaxy of investment options, pretending to be investors and traders, when all we really are is savers waiting, once again, to be sacrificed

Fri, 05/23/2014 - 13:49 | 4789180 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

From a while back:

http://fofoa.blogspot.com/2012/01/studebaker-effect.html

FOFOA, of course, is right.  Don't be a sacrificial lamb.  Hold gold.

***

You can search FOFOA's blog for any important quotations at Google like this:

fofoa.blogspot.com:Have you noticed how many people think they are traders and investors these days?

Works like a charm...

Fri, 05/23/2014 - 13:52 | 4789207 lasvegaspersona
lasvegaspersona's picture

Spitz

In today's world of money savers are no longer needed for loans or 'investing'. Any money they voluntarily pull from the consumption cycle is no longer able to push inflation (so the gov likes that). Loans are made from nothing and the supply is potentially endless.....no savers needed. Trouble can only happen when spending begins in earnest. Some is already happening in the equities market. As long as the money regulators keep thing right all will be well....unless of course the whole world wakes up one day and collectively says: 'hey, we don't need no stinkin dollars'....in that case the money managers are helpless and will only be able to watch as hyperinflation happens, perhaps in a nanosecond.

Fri, 05/23/2014 - 13:37 | 4789169 starman
starman's picture

With a family name like Hiduke?! anything possible! Hi Duke. 

Fri, 05/23/2014 - 13:45 | 4789189 lasvegaspersona
lasvegaspersona's picture

Heyduke to Hiduke in a generation or so. Ed Abbey is turning in his (secret, known to but a few, supposedly on federal land) grave

Fri, 05/23/2014 - 14:00 | 4789233 youngman
youngman's picture

Rudolf the Red knows Rain Dear.....my favorite liine

Fri, 05/23/2014 - 13:50 | 4789202 Hongcha
Hongcha's picture

Good for him.  I am glad to see a young American pull himself up by the bootstraps.  This is an inspiring story.

Fri, 05/23/2014 - 13:51 | 4789206 youngman
youngman's picture

Penny Stocks were big in the 80s....same here I guess...just fill out a form..and voila..you have a company....make up a story and you can sucker an investor into anything....remember the 4 to 1 tax write offs of the 80s...a scam is born every minute..more now as people are chasing returns...the banks pay you nothing to save...

Fri, 05/23/2014 - 14:11 | 4789249 RaceToTheBottom
RaceToTheBottom's picture

Might be more problems now than historically as there is no downside for conning people out of their money.  All Laws rescinded, accounting and otherwise.

Fri, 05/23/2014 - 14:20 | 4789317 Duc888
Duc888's picture

 

 

Didn't I read here on ZH yesterday that someones estimate of the amount of shale oil out there was "off" by like 93% or something like that?

 

Fri, 05/23/2014 - 23:05 | 4789471 Cthonic
Cthonic's picture

#makeitrain

Do NOT follow this link or you will be banned from the site!