Autry Stephens, a prominent figure among the last generation of Texas wildcatters, is on the verge of becoming one of the wealthiest individuals globally, a prospect that elicits mixed emotions for the 85-year-old tycoon. In a momentous announcement on Monday, Stephens revealed his decision to sell Endeavor Energy Resources, the company that originated from a well he drilled 45 years ago, to Diamondback Energy in a substantial $26 billion stock-and-cash transaction. While most of the proceeds will enrich Stephens and his family, the impending sale carries a tinge of melancholy for the seasoned oilman.
Endeavor, a company long considered a gem in the prolific Permian Basin stretching across West Texas and New Mexico, was nurtured by Stephens over the years. Despite enticing offers from oil giants like Exxon Mobil, Stephens had steadfastly resisted selling, cherishing the tightly-knit community within the company where many employees dedicated their entire careers. Expressing his sentiments, Stephens remarked on the familial atmosphere at Endeavor, saying, “I’ll miss the people there. It was kind of a little family.”
The pivotal factor that eventually swayed Stephens towards this momentous decision was a recent diagnosis of prostate cancer. The subsequent treatment has left him physically weakened and, in his own words, “That was a big factor in this decision.” This move effectively concludes a remarkable 62-year career that witnessed the evolution of the Organization of the Petroleum Exporting Countries (OPEC), the perceived decline of U.S. crude production, and its unforeseen resurgence through the shale boom.
In joining the ranks of private oil companies capitalizing on the shale boom, Stephens aligns with counterparts such as CrownRock, led by Timothy Dunn, which agreed to a sale to Occidental Petroleum for nearly $11 billion in December. This flurry of deals has transformed the oil landscape, consolidating smaller drillers who triggered the shale boom into larger producers seeking scale and premium acreage.
Endeavor stands out as one of the last colossal privately held drillers, boasting the largest remaining inventory of top-tier oil acreage among private Permian companies. With approximately 350,000 net acres and a daily oil production of around 200,000 barrels, Endeavor’s merger with Diamondback positions them to rival industry giants like ConocoPhillips and Exxon in the Permian region.
The lion’s share of the sale proceeds, including $8 billion in cash, is expected to accrue to Stephens and his family, who currently own almost all of Endeavor. Prior to the announcement, Stephens had an estimated fortune of nearly $15 billion. Despite his substantial wealth, Stephens, known for his frugality, has retained a relatively low profile outside the oil industry. Tales of his parsimony circulate among Midland executives, emphasizing his preference for Southwest Airlines flights, continued use of an old Toyota Land Cruiser, and his daily presence at the downtown office.
The decision to sell was prompted by Stephens’ health concerns, which have added a layer of complexity to his familial considerations. While his daughter, Lyndal Greth, sits on Endeavor’s board, Stephens believed entrusting her with the company’s leadership would impose too great a burden as she raises children. Greth echoed her father’s sentiments, emphasizing her commitment to focusing on her young family while expressing gratitude for the opportunity to work with Stephens.
Endeavor initiated a sales process in December, attracting interest from major players like Exxon and ConocoPhillips. Ultimately, Diamondback emerged as the preferred suitor due to cultural affinities and geographical proximity. Stephens highlighted the prospect of job continuity for most of Endeavor’s employees as a crucial factor in choosing Diamondback.
Autry Stephens’ journey from a farming community in central Texas to the pinnacle of the oil industry reflects a trajectory marked by resilience and strategic decisions. A petroleum engineering graduate from the University of Texas at Austin, Stephens initially envisioned exotic locales in the oil-rich Lake Maracaibo in Venezuela but ultimately chose a hands-on approach, joining Humble Oil and later serving in the U.S. Army Corps of Engineers.
Drilling his first well in 1979 marked the beginning of his independent ventures, culminating in the founding of Endeavor in 2000. Over the years, Stephens weathered the cyclical nature of the oil business, nearly facing crises in 2008 and 2014. By refocusing on drilling horizontal wells and leveraging fracking techniques in 2016, Endeavor embraced the shale revolution, transforming the once dormant Permian basin into a prolific source of oil.
While Diamondback’s acquisition of Endeavor is a significant triumph for the former, the deal places Stephens and his family among the world’s wealthiest individuals. Reflecting on the impending windfall, Stephens remains pragmatic, stating, “I just haven’t thought about it.” This momentous sale marks the end of an era for one of the last Texas wildcatters, leaving an indelible legacy in the annals of the oil industry.
