"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...