The storied Hunt family has once again surfaced in the Permian Basin to predictably little fanfare.
It’s the family’s style: Petro-Hunt LLC is a large but quietly enigmatic company often low key about its dealings. The family’s patriarch was legendary oil tycoon H.L. Hunt. Despite its lineage, the company prefers to operate far below the radar. Yet it remains a player in the shale world, popping up now and then to make another deal before fading into the background.
In March, Petro-Hunt was again on the move. In a blink-and-miss-it deal, Petro-Hunt LLC closed on the purchase of Delaware Basin assets from Admiral Permian Resources.
“Throughout the family history, even in Petro-Hunt’s history, we’ve been in and out of the Permian on and off,” said Marshall T. Hunt, vice president of corporate development. “We were looking at getting back into either the Midland Basin or Delaware Basin and had worked several packages, marketed packages or other non-marketed opportunities.
“This one was one that we had worked and were lucky enough to be the winning bid,” he said.
In 2012, the company grabbed headlines as it sold a portion of its Williston Basin position, 81,000 net producing acres, to Halcon Resources Corp. for $1.45 billion.
The company retains a large position in the Williston Basin where it has been a top 10 producer year-over-year, and the Williston remains a core area for the company. In 2018, the company purchased Williston Basin assets from SM Energy Co., including 119,000 net acres and 246 operated wells.
Even as Petro-Hunt keeps a low profile, it has driven itself into becoming one of the top private E&Ps in the U.S.
“We’re not private equity backed. We’re not publicly traded,” Marshall Hunt said. “We’re a family-owned company.”
Petro-Hunt’s March deal was in the same form. Admiral Permian was a privately held E&P company focused on the acquisition and development of oil and gas properties in the Permian Basin. Admiral Permian was majority owned by Ares Management LP, as well as Pine Brook and members of management, according to their website.
Petro-Hunt acquired Admiral Permian’s assets, including operated oil and gas production and 21,430 net acres of leasehold in northwest Reeves and northeast Culberson counties, Texas. Gross operated production averages about 7,000 bbl/d of oil and 100 MMcf/d of gas. In a press release issued by the company, Douglas Hunt, director of acquisitions and divestitures, said, “Petro-Hunt plans to commence a drilling program later in the year” on the Admiral acreage.
The Dallas-based company historically has kept deal terms close to the vest. Petro-Hunt didn’t disclose financial details for its purchase of Admiral Permian properties.
Asked about the company’s advisers on the deal, Marshall Hunt said Petro-Hunt doesn’t like to use advisors on the buy side and would rather source and make offers on deals themselves.
“It’s a family business. It all comes right through the whole family. The family is still involved with several family members working in important key roles and running all aspects of the company day-to-day. All that funnels through the same set of people at the top.”
The company largely stays out of the spotlight, despite its history, which is recounted on roadside historical plaques, blogs and Encyclopedia Britannica.
Petro-Hunt Company Timeline
|H.L. Hunt starts oil and gas career in El Dorado, Ark.|
|Hunt plays an active role in developing the East Texas Oil Field at the drill test of the Daisy Bradford #3.|
Hunt discovers Olla Field and Nebo-Hemphill Field in LaSalle Parish, La., followed by the first well drilled in Alabama.
|W. Herbert Hunt and Nelson Bunker Hunt discover Sarir Field in Libya, one of the largest oil fields in Africa.|
|Placid International opened the Dutch North Sea with the discovery on Block L 10/11.|
|Placid Refining purchased the Port Allen refinery in Louisiana.|
Petro-Hunt drilled and completed the world’s first medium-radius, double lateral horizontal well in South Texas.
|Through six strategic acquisitions in the Williston Basin, South Texas, East Texas, Louisiana and Mississippi, Petro-Hunt purchased 348 wells, producing 20,650 boe/d that laid the foundation to becoming one of the top private liquids producers in the U.S. The two fields in the Williston Basin were later developed for the Bakken/ Three Forks Formation starting in 2006 and currently produces 33,700 boe/d from 223 wells.|
|Petro-Hunt drilled the USA No. 2D-3-1H well. The well has produced just under 2 MMbbl of oil and is the highest producing well in the state of North Dakota in the Bakken/Three Forks Formation.|
|Petro-Hunt operated up to 16 rigs in the Williston Basin and became one of the top liquids producers in North Dakota.|
|Petro-Hunt purchased 119,000 net acres and 246 operated wells from SM Energy Co. in the Williston Basin.|
Petro-Hunt purchased over 21,000 net acres and 63 operated wells from Admiral Permian in the Delaware Basin.
Inside the company, it’s simply family.
“I am third generation here at Petro-Hunt, and my grandad W. Herbert Hunt is still in the office every day. He’s 93,” Marshall Hunt said. His father Bruce W. Hunt is president of the company.
“We try to stay out of the press, and we chose to do things that way,” he said.
Behind the scenes, Petro-Hunt has become a remarkably intricate, integrated private company.
Petro-Hunt’s website bills itself as among the top 10 private liquids producers with roughly production averaging 98,000 boe/d in the U.S. with operations in several states, including Texas, Louisiana, Oklahoma, North Dakota, Wyoming, Colorado and Montana. Petro-Hunt affiliate Pillar Energy, founded in 2009, buys minerals, royalties and nonoperated working interests across all basins in the Lower 48.
Pillar Energy has acquired more than 3,000 net acres of leasehold and over 7,600 net mineral acres with interest in 1,850 producing wells in various U.S. basins. Another family company, Pledge Resources, holds 2,800 acres of leasehold and more than 11,000 net mineral acres.
Petro-Hunt also owns and operates a gas processing facility in North Dakota, a part owner of an oil refinery in Port Allen and is actively developing its real estate position in the Dallas-Fort Worth, Texas, area. The company also has an oilfield service company. Petro-Hunt and affiliates also operate a private equity alternative investment division and a 4,600-acre cow calf breeding ranch and exotic wildlife refuge.
In some senses, the company is following in the footsteps of H.L. Hunt, who’s first ventures involved cotton speculation and endeavors in other industries unrelated to oil and gas.
But it was H.L. Hunt’s endeavors in the oil fields that made his fortune.
As the Encyclopedia Britannica recounts, H.L. Hunt borrowed $50 to begin trading oil leases in Arkansas, buying and selling leases nearly simultaneously “so that he made money without spending any.”
His $30,000 bet on the Daisy Bradford No. 3 well in Rusk County opened up an oil boom in Texas and unleashed the production of an oil field that eventually produced 3.5 Bbbl of oil.
Petro-Hunt’s own diversification has made oil and gas one of its primary focus areas but not its singular pursuit.
“We are diversified in other aspects, whether that’s a family office alternative investment arm or our real estate arm,” Marshall Hunt said. “And all those are not just kind of small bolt-on business lines, they are big lines of business in their own right.”
Herbert Hunt’s hobby has always been in real estate and over the past 20 years the real estate department amassed around 6,000 acres of properties across Dallas-Fort Worth. The Hunt’s real estate department has been very active, starting and selling a single-family development, developing an industrial park and building and then selling several multi-family complexes in Forney, Texas. They are actively developing and selling their properties in Plano, Fort Worth, Fate and Lavon, Texas.
The Petro-Hunt private equity arm has been very active during the past 10 years, investing well over $500 million in 120 various funds, private equity groups and companies across all types of industries. According to its website, the company has invested in energy, technology, biotech, healthcare, real estate and growth capital, just to name a few.
Its recent Admiral Permian deal added acreage in Reeves and Culberson counties, Texas. Petro-Hunt additionally purchased Admiral Permian’s existing gathering systems, pipelines, compression and water treatment infrastructure, Hunt said.
Petro-Hunt will look to “acquire additional bolt-on assets to the existing Admiral acquisition. In addition to the Admiral acquisition, we made other strategic acquisitions in the Delaware and even the Midland Basin, looking for operated, nonoperated, and mineral and royalty assets,” he said.
Just don’t expect the company to make much of a fuss when it does.
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