Tom Petrie; James Parkman

Petrie Parkman & Co.

Editor's note: This profile is part of Hart Energy's 50th anniversary Hall of Fame series honoring industry pioneers of the past 50 years and the Agents of Change (ACEs) who are leading the energy sector into the future.

Tom Petrie, James Parkman

Petrie Parkman had barely opened its doors (literally) in 1989 when Raymond Plank walked through them (figuratively) with a proposal and the energy industry’s newest transaction firm was off and flying. Literally. 

The co-founder of Apache Oil Corp. (now APA) “got in touch with us and said, ‘I need to be bigger. Our company is not big enough,’” James Parkman told Hart Energy. So, Parkman and Tom Petrie commenced to rack up frequent flier miles over many months, meeting with CEOs in Europe, New York, Chicago, Houston and Denver to find the big deal that would satisfy Plank’s desire to elevate Apache into the big leagues.

And they found it with a large parcel in Texas and New Mexico that Amoco wanted to sell. The former Standard Oil Co. had a reputation for making negotiations difficult and the two sides were stuck on the price. Petrie and Parkman devised a production payment plan to bridge the gap between the asking price and bid price. The $550 million deal was completed in 1991 and suddenly Apache had doubled its size.

“This was just shortly after we started the firm,” Parkman said. “So, we were able to show that we could be effective for clients seeking to do a transitional deal to move their company forward.”

Petrie Parkman may have been new, but its founders were not simply energy transaction veterans but Wall Street royalty in their own right. They met at the First Boston investment bank in New York when Parkman joined in 1982. The firm had aspirations of challenging Goldman Sachs and Morgan Stanley for the top spot on the Street, and recruited Parkman to concentrate on energy transactions.

Tom Petrie was First Boston’s managing director and securities analyst star and, in fact, had been rated as the No. 1 analyst on Wall Street by Institutional Investor. The bank was aggressively pursuing takeover defense and merger clients and Petrie was a powerful asset to attract them. Among those clients was T. Boone Pickens. Petrie and Parkman worked on more than a few of his takeover adventures.

For business and finance reporters, Petrie’s insight was well worth an interview.

“Tom was quoted frequently in Barron’s, and if he made a stock recommendation through Barron’s, it would move the needle,” Parkman said.

But Petrie and Parkman were not enamored of New York City. When Wall Street experienced turbulence in the late 1980s (think Martin Siegel, Dennis Levine, Ivan Boesky and Michael Milken), the two took the opportunity to leave and open their own shop with offices in Denver for underwriting and Houston for M&A.

Plank may have been the first big client but many more would follow, and with success came opportunities to make their mark.

During the Clinton administration, Vice President Al Gore promoted an initiative to streamline government and sell of certain assets. Among them was the Elk Hills Naval Petroleum Reserve in California, a 47,000-acre tract with 1,000 producing wells, a power plant, gas processing plant and 1 billion barrels of crude oil. The Department of Energy wanted a transaction by commercial, not government standards and hired Petrie Parkman to get it done.

“That was a very important transaction for us, and we had to have a partnership with Credit Suisse First Boston to gain that position,” Parkman said.

Occidental Petroleum made the winning bid of $3.65 billion in October 1997, the largest sale of U.S. Government property to that time.

“I had the honor of sitting in a room with Steve Chazen when he made the final bid to me,” Parkman said. “So that was a highlight of my career at Petrie Parkman.”

The Elk Hills deal showed that the two had the chops to handle government deals. Around 2000, the Kingdom of Saudi Arabia hired Petrie Parkman to solicit proposals to operate natural gas assets for Aramco. It was a drawn-out project over two years that involved the efforts of several of Petrie Parkman’s people and intricate negotiating with a high-level government committee, but a deal with an international oil company was eventually completed.

More importantly, it changed the course of the Saudi energy industry.

“That program was the first step in the transition of Aramco and the Petroleum Ministry that brought it into modern management and practices, and laid the groundwork for all that Aramco and the Petroleum Ministry is today,” Parkman said.

In 17 years, Petrie Parkman engaged in transactions totaling $84 billion. Petrie and Parkman sold their investment bank to Merrill Lynch in 2006. Tom Petrie became vice chairman of Merrill Lynch in 2007 and left to join Denver-based Petrie Partners in 2012. He stepped away from the firm earlier this year. James Parkman joined Houston-based Parkman Whaling in 2007.

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