Young entrepreneurs choosing oil patch over Silicon Valley

Bloomberg/Fuel Fix:

Mark Hiduke just raised $100 million to build his three-week-old company. This 27-year-old isn’t a Silicon Valley technology entrepreneur. He’s a Texas oilman.

The oil and gas industry is suddenly brimming with upstart millennials like Hiduke after decades of failing to attract and retain new entrants. Now that a breakthrough in drilling technology has U.S. oil and gas production surging, an aging workforce is welcoming a new generation of wildcatters, landmen, engineers, investors, entrepreneurs and aspiring oil barons.

“I’ve never seen an industry do what the oil and gas industry has done in the last 10 years,” T. Boone Pickens, the 85-year-old billionaire oilman, said in an April 25 phone interview from his Dallas office. “Ten years ago I could not have made this statement that you have picked the right career.”

Hiduke’s company, Dallas-based PetroCore LLC, received the $100 million commitment from a local private-equity firm in May. He and his three partners plan to buy underdeveloped land and drill shale wells, he said. They’ll draw on the expertise of their engineer, who, at 57, is old enough to be his father.

The shale boom has “created a lot of opportunity for young professionals to jump in and be given enormous responsibility,” Hiduke said by telephone May 6. “It’s pretty much tech and then energy.”

As oil and gas producers change their focus from grabbing land to drilling, young entrepreneurs are forming companies to trade everything from minerals to leases and wells to equities. They’re competing against, and sometimes collaborating with, industry veterans twice their age.

“These guys are going to be the poster children of self-made oil and gas tycoons,” Nathen McEown, a 33-year-old accountant at Whitley Penn LLP in Dallas who organizes networking dinners, said in an e-mail April 1. “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 only knows the shale boom and knowledge of conventional drilling might retire with the baby boomers, Kimberly Lacher said by phone May 8. The 38-year-old studied to be a chemical engineer and was reassigned by her employer to petroleum just when the shale boom was starting.

Now she and her 31-year-old business partner, Wood Brookshire, head Vendera Resources, which has invested a total of more than $50 million in about 1,200 wells. The Dallas-based duo turned their first fund of a few hundred thousand dollars between the two of them into $4 million today, Brookshire said.
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There is more.

It is where the opportunity is.  The job growth from the energy business is not limited to the oil patch but also includes supplying the industry as well as manufacturing jobs that take advantage of the cheap energy.  It also includes builders of housing and office buildings.