Hunt Petroleum Corporation was an oil and gas exploration and production company formed in 1950. The company was originally called Petrol Production Co. and was later renamed Hunt Petroleum Corporation. The company was a Delaware corporation owned 52.84% by the Margaret Hunt Trust Estate and 47.16% by the Haroldson L. Hunt, Jr. Trust Estate. The primary beneficiaries of these two trusts are the two eldest children of the late H. L. Hunt and Lyda Bunker Hunt. Hunt Petroleum Corporation had no common ownership and was not affiliated with any of the following entities: Hunt Oil Company; Petro-Hunt, LLC; Hunt Exploration; Unity Hunt; Hunt Properties; or Rosewood Resources.
XTO Energy Inc. agreed to acquire Hunt Petroleum Corp. for $4.2 billion, ending the 83-year run of a company founded by the late billionaire H.L. Hunt.
XTO, the U.S. natural-gas producer that has made more than two dozen acquisitions since 2000, will pay $2.6 billion in cash and $1.6 billion in stock, according to a statement today by the Fort Worth, Texas-based buyer. Most of Hunt's wells are in East Texas and Louisiana, where XTO is a leading gas producer.
XTO is paying less than $4 per thousand cubic feet of gas reserves, about one-third of current U.S. prices for a fuel that has risen even faster than crude oil this year. Hunt family heirs are selling out after crude surged to a record above $135 a barrel and gas futures jumped 66 percent in 2008.
``Over the last year, the prices paid in similar deals were $3 to $3.25'' per thousand cubic feet, said Michael Henzi, an analyst at Sterne Agee & Leach Inc. in Boston who rates XTO shares ``buy'' and doesn't own any. ``But natural gas has risen a lot more than that over that same time period, so $4 is a nice price to be paying for the assets.''
XTO raised its forecast for output growth this year to as much as 30 percent, based on the Hunt transaction and a $1.85 billion purchase announced last month.
XTO fell 70 cents to $67.02 in New York Stock Exchange composite trading. The stock rose as much as 4.3 percent this morning, before falling along with oil and gas futures and other petroleum producers. Before today, the stock had jumped 32 percent this year.
Search for Buyer
Directors of Hunt and two related companies owned by H.L. Hunt descendants began seeking a buyer late last year with the help of Goldman Sachs Group Inc., XTO said. Hunt heirs were embroiled in a fight over the trusts that owned Hunt Petroleum after the founder's eldest daughter, Margaret Hunt Hill, died last year, the Dallas Morning News reported in February.
H.L. Hunt made his first fortune in 1921, when he struck oil in El Dorado, Arkansas. He was broke again by the end of that decade after failed investments in Florida real estate and excessive drilling that depleted his oil fields.
Hunt stuck oil again in East Texas in 1930 and within two years owned 900 wells and a pipeline to haul the crude to markets, according to the Texas State Historical Association. In 1935, he split shares in the company among trusts for his six children. Fortune magazine named him the richest man in America in 1948.
The Dallas-based company expanded into the North Sea in 1970. Hunt died in 1974 at 85.
`Black Box'
``Hunt is a private company so it's sort of a black box in that we don't know exactly what XTO is getting here,'' Henzi said. ``But it's a well-run energy company that has invested wisely and done very well for its owners.''
XTO said it's locking in sales of 100 million cubic feet of daily output, or 56 percent of the gas production it will gain by acquiring Hunt, for 28 months at $11.08 per thousand cubic feet. The deal is scheduled to close by Sept. 3.
``With the current outlook for commodity prices and our development plan, we have facilitated a history-making deal for XTO which should generate over $1.2 billion in cash flow next year,'' Chief Executive Officer Bob Simpson said in the statement.
The Hunt properties hold the equivalent of 1.05 trillion cubic feet of gas, according to an estimate by XTO's engineers. In addition to the East Texas and Louisiana fields, the assets include onshore and offshore reserves in Mississippi, Alabama, the North Sea and North Dakota.
Staff Retention
``Theirs was an organization of excellence,'' Simpson told investors on a conference call. ``We'll be looking to retain as much of that staff as we can.''
The transaction will boost XTO's gas output by 12 percent, oil production by 16 percent and gas liquids by 14 percent, according to the statement. Gas accounts for about 80 percent of the company's output.
Goldman and Tristone Capital LLC advised Hunt on the deal, and Jones Day provided legal counsel. Energy Spectrum Advisors Inc. and Haynes & Boone advised the related companies also included in the sale, Hassie Hunt Exploration Co. and Hassie Hunt Production Co. Gibson Dunn was legal adviser to XTO.
XTO will likely spend an additional $1.5 billion on acquisitions this year, Simpson said. He said he expects gas prices to keep rising. U.S. gas futures have outperformed all commodities other than coal this year.
Hunt focused on steady production rates rather than maximizing output from its fields, including some that have been pumping since the 1930s, XTO President Keith Hutton said on the call. ``A lot of the upsides are still left for us to work on,'' he said.
Hunt Petroleum is not affiliated with Dallas-based Hunt Oil Co., headed by Ray Lee Hunt, a son of H.L. Hunt.
The vanishing supply of talent will force many companies to take a hard look at how they develop key people. Gone are the days when companies were satisfied to find loyal, hardworking candidates. Instead, they need a mix of highly analytical people with technological savvy, creativity, global know-how, adaptability, and great communication skills to collaboratively solve complex and rapidly changing issues.
Developing such skills is rarely achieved by spending more on training. Formal training programs are important, especially when employees lack key skills or knowledge. But even online courses that provide access to coursework 24 hours a day, 7 days a week can fall short when it comes to resolving complicated, time-sensitive issues.
Rather than push more information onto employees through conventional training, it is more important that they “learn how to learn.� The sales executive who must know the customer’s business backwards and forwards, as well as his own, and those of his alliance partners can no longer be a deep specialist in a single product or service. It is more important that he knows where to go for information and whom to ask.
When people need to solve a problem, they tend to turn to others—not to their computers. Solving complex problems requires that critical talent focus on their relationships with others. Research suggests that people who cultivate broad and diverse networks are more successful than those who rely strictly on their inner circles.20
The best way to develop critical talent is through the collaborative resolution of real-life issues (“action learning�). A well-known study conducted over a decade by the highly respected Center for Creative Leadership finds that “stretch� assignments and daily interactions with others are far more important to the development of successful executives than the formal training they received.21 Not surprisingly, the hardships people endure provide the richest learning experiences of all. When asked to identify the key events that made a difference in how they manage today, only 3 percent of executives cited formal coursework. On the other hand, 12 percent pointed to business mistakes as their most potent learning experience. Another 12 percent cited a change in project scope as a key event in their development. Interactions with others also commanded high responses.22
People learn the most in situations that stretch them—the “trial by fire� experiences that put them slightly outside of their comfort zones. They learn not by pondering a hypothetical problem, but by directly tackling real issues. As a senior Microsoft human resources executive has noted: “We have very limited educational and training opportunities for our managers. But I think that we have absolutely developed leaders. You get people having to move from managing ten people to managing 200 overnight. That kind of stretch in the job will either create growth or death. Fortunately, we have such great people that most of them have just grown by leaps and bounds.�24
People also learn from those they trust: bosses, subordinates, peers, and mentors, both internal and external. At its heart, learning is social in nature. SAIC, a $6.7 billion employeeowned research and information systems development company, recognizes that people learn the most on-the-job and from each other. To ramp up learning before important initiatives, SAIC has formal processes that connect individuals and teams so that the inexperienced can learn from the experienced. These “peer assist programs� have become a natural way to approach complex assignments. Similarly, project managers at British Petroleum are required to request the help of peers before initiating large projects, such as drilling wells.25 Classrooms, books, and e-learning are helpful when people know little and have time to learn from scratch. But when experience is accessible and high costs and time are at stake, “peer assists� can be a much more effective way to expose people to the knowledge and experience they need— fast.
Mentoring and coaching are also important to learning— especially when expectations are made clear and tied to explicit goals. Deutsche Bank's Global Partnership Network for Women (GPNW) employs "mentoring circles" to promote the productivity and networking of its growing population of female talent. Each circle comprises one to two mentors and four to five “mentees.�26 The approach gives employees greater diversity and exposure to the business than traditional one-on-one coaching. At Campbell Soup Co., CEO Douglas Conant measures managers on how well they coach and develop their staffs.�27 In this way, Conant acknowledges the crucial role that the quality of interactions has on the financial performance of the company.
XTO Energy Inc. agreed to acquire Hunt Petroleum Corp. for $4.2 billion, ending the 83-year run of a company founded by the late billionaire H.L. Hunt.
XTO, the U.S. natural-gas producer that has made more than two dozen acquisitions since 2000, will pay $2.6 billion in cash and $1.6 billion in stock, according to a statement today by the Fort Worth, Texas-based buyer. Most of Hunt's wells are in East Texas and Louisiana, where XTO is a leading gas producer.
XTO is paying less than $4 per thousand cubic feet of gas reserves, about one-third of current U.S. prices for a fuel that has risen even faster than crude oil this year. Hunt family heirs are selling out after crude surged to a record above $135 a barrel and gas futures jumped 66 percent in 2008.
``Over the last year, the prices paid in similar deals were $3 to $3.25'' per thousand cubic feet, said Michael Henzi, an analyst at Sterne Agee & Leach Inc. in Boston who rates XTO shares ``buy'' and doesn't own any. ``But natural gas has risen a lot more than that over that same time period, so $4 is a nice price to be paying for the assets.''
XTO raised its forecast for output growth this year to as much as 30 percent, based on the Hunt transaction and a $1.85 billion purchase announced last month.
XTO fell 70 cents to $67.02 in New York Stock Exchange composite trading. The stock rose as much as 4.3 percent this morning, before falling along with oil and gas futures and other petroleum producers. Before today, the stock had jumped 32 percent this year.
Search for Buyer
Directors of Hunt and two related companies owned by H.L. Hunt descendants began seeking a buyer late last year with the help of Goldman Sachs Group Inc., XTO said. Hunt heirs were embroiled in a fight over the trusts that owned Hunt Petroleum after the founder's eldest daughter, Margaret Hunt Hill, died last year, the Dallas Morning News reported in February.
H.L. Hunt made his first fortune in 1921, when he struck oil in El Dorado, Arkansas. He was broke again by the end of that decade after failed investments in Florida real estate and excessive drilling that depleted his oil fields.
Hunt stuck oil again in East Texas in 1930 and within two years owned 900 wells and a pipeline to haul the crude to markets, according to the Texas State Historical Association. In 1935, he split shares in the company among trusts for his six children. Fortune magazine named him the richest man in America in 1948.
The Dallas-based company expanded into the North Sea in 1970. Hunt died in 1974 at 85.
`Black Box'
``Hunt is a private company so it's sort of a black box in that we don't know exactly what XTO is getting here,'' Henzi said. ``But it's a well-run energy company that has invested wisely and done very well for its owners.''
XTO said it's locking in sales of 100 million cubic feet of daily output, or 56 percent of the gas production it will gain by acquiring Hunt, for 28 months at $11.08 per thousand cubic feet. The deal is scheduled to close by Sept. 3.
``With the current outlook for commodity prices and our development plan, we have facilitated a history-making deal for XTO which should generate over $1.2 billion in cash flow next year,'' Chief Executive Officer Bob Simpson said in the statement.
The Hunt properties hold the equivalent of 1.05 trillion cubic feet of gas, according to an estimate by XTO's engineers. In addition to the East Texas and Louisiana fields, the assets include onshore and offshore reserves in Mississippi, Alabama, the North Sea and North Dakota.
Staff Retention
``Theirs was an organization of excellence,'' Simpson told investors on a conference call. ``We'll be looking to retain as much of that staff as we can.''
The transaction will boost XTO's gas output by 12 percent, oil production by 16 percent and gas liquids by 14 percent, according to the statement. Gas accounts for about 80 percent of the company's output.
Goldman and Tristone Capital LLC advised Hunt on the deal, and Jones Day provided legal counsel. Energy Spectrum Advisors Inc. and Haynes & Boone advised the related companies also included in the sale, Hassie Hunt Exploration Co. and Hassie Hunt Production Co. Gibson Dunn was legal adviser to XTO.
XTO will likely spend an additional $1.5 billion on acquisitions this year, Simpson said. He said he expects gas prices to keep rising. U.S. gas futures have outperformed all commodities other than coal this year.
Hunt focused on steady production rates rather than maximizing output from its fields, including some that have been pumping since the 1930s, XTO President Keith Hutton said on the call. ``A lot of the upsides are still left for us to work on,'' he said.
Hunt Petroleum is not affiliated with Dallas-based Hunt Oil Co., headed by Ray Lee Hunt, a son of H.L. Hunt.
The vanishing supply of talent will force many companies to take a hard look at how they develop key people. Gone are the days when companies were satisfied to find loyal, hardworking candidates. Instead, they need a mix of highly analytical people with technological savvy, creativity, global know-how, adaptability, and great communication skills to collaboratively solve complex and rapidly changing issues.
Developing such skills is rarely achieved by spending more on training. Formal training programs are important, especially when employees lack key skills or knowledge. But even online courses that provide access to coursework 24 hours a day, 7 days a week can fall short when it comes to resolving complicated, time-sensitive issues.
Rather than push more information onto employees through conventional training, it is more important that they “learn how to learn.� The sales executive who must know the customer’s business backwards and forwards, as well as his own, and those of his alliance partners can no longer be a deep specialist in a single product or service. It is more important that he knows where to go for information and whom to ask.
When people need to solve a problem, they tend to turn to others—not to their computers. Solving complex problems requires that critical talent focus on their relationships with others. Research suggests that people who cultivate broad and diverse networks are more successful than those who rely strictly on their inner circles.20
The best way to develop critical talent is through the collaborative resolution of real-life issues (“action learning�). A well-known study conducted over a decade by the highly respected Center for Creative Leadership finds that “stretch� assignments and daily interactions with others are far more important to the development of successful executives than the formal training they received.21 Not surprisingly, the hardships people endure provide the richest learning experiences of all. When asked to identify the key events that made a difference in how they manage today, only 3 percent of executives cited formal coursework. On the other hand, 12 percent pointed to business mistakes as their most potent learning experience. Another 12 percent cited a change in project scope as a key event in their development. Interactions with others also commanded high responses.22
People learn the most in situations that stretch them—the “trial by fire� experiences that put them slightly outside of their comfort zones. They learn not by pondering a hypothetical problem, but by directly tackling real issues. As a senior Microsoft human resources executive has noted: “We have very limited educational and training opportunities for our managers. But I think that we have absolutely developed leaders. You get people having to move from managing ten people to managing 200 overnight. That kind of stretch in the job will either create growth or death. Fortunately, we have such great people that most of them have just grown by leaps and bounds.�24
People also learn from those they trust: bosses, subordinates, peers, and mentors, both internal and external. At its heart, learning is social in nature. SAIC, a $6.7 billion employeeowned research and information systems development company, recognizes that people learn the most on-the-job and from each other. To ramp up learning before important initiatives, SAIC has formal processes that connect individuals and teams so that the inexperienced can learn from the experienced. These “peer assist programs� have become a natural way to approach complex assignments. Similarly, project managers at British Petroleum are required to request the help of peers before initiating large projects, such as drilling wells.25 Classrooms, books, and e-learning are helpful when people know little and have time to learn from scratch. But when experience is accessible and high costs and time are at stake, “peer assists� can be a much more effective way to expose people to the knowledge and experience they need— fast.
Mentoring and coaching are also important to learning— especially when expectations are made clear and tied to explicit goals. Deutsche Bank's Global Partnership Network for Women (GPNW) employs "mentoring circles" to promote the productivity and networking of its growing population of female talent. Each circle comprises one to two mentors and four to five “mentees.�26 The approach gives employees greater diversity and exposure to the business than traditional one-on-one coaching. At Campbell Soup Co., CEO Douglas Conant measures managers on how well they coach and develop their staffs.�27 In this way, Conant acknowledges the crucial role that the quality of interactions has on the financial performance of the company.