Hildebrand’s Hilcorp Energy Co. agreed to buy the fields in the San Juan Basin, taking on holdings in the southwestern U.S. that Conoco sees as less appealing given their focus on lower-profit natural gas. For Houston-based Hilcorp, it’s the company’s bread and butter.
Founded in 1989, Hilcorp calls itself one of America’s largest closely held oil and gas producers. It’s made billions off of aging fields where it works to capture “energy resources that would otherwise be lost,” according to its website. It’s formula: take over and develop so-called conventional fields, the kind of old-school drilling areas that have been eclipsed in the U.S. by high-margin, quick turnaround shale-fracking projects.
The deal “fits the profile of the established, conventional assets Hilcorp typically aims to secure and enhance,” Chief Development Officer Jason Rebrook said in the company’s statement.
Hildebrand, Hilcorp’s founder, chairman and chief executive officer, is a geologist and petroleum engineer by training who once worked for Exxon. The focus on reviving other companies’ castoffs has worked well for him: He’s currently worth $9.7 billion, making him the 47th richest American, according to data compiled by Bloomberg.
Pennies from Heaven
His company may be better known for its generosity to workers. Hilcorp made headlines in 2015 for giving each of its employees a $100,000 bonus after a successful push to double the business’ value. That followed an earlier program in which employees could earn as much as a $50,000 bonus.
“Early on, I worked at places where bonuses were pennies from heaven,” Hildebrand told The New York Times in 2010. “Hilcorp ties incentives to things our people can control.”
Reached by telephone, Hilcorp spokesman Justin Furnace declined to comment about the company’s plans beyond the statement. The explorer has more than 1,500 employees and operations in Texas, Lousiana, Wyoming, the northeast U.S. and Alaska. Over the last five years, it’s spent more than $3.5 billion on acquisitions and invested more than $4.1 billion in its properties, according to its website.
In 2012, the company sold wells in South Texas to Marathon Oil Corp. for $3.5 billion; it unloaded more holdings in the Gulf of Mexico that year for $550 million. Buyout firms including KKR & Co. and the Carlyle Group, a partner in the New Mexico venture, have been among its backers.
More recently, Hilcorp has come under scrutiny for a pipeline that’s leaked natural gas into Alaska’s Cook Inlet, a habitat for endangered beluga whales and other species. The company said on April 10 that it had begun repairs on the pipe. Federal regulators have also ordered the company to investigate a suspected crude oil leak in the Inlet; Hilcorp has said it’s not the source of that contamination.