Trevor Rees-Jones: The Wildcatter
He left a law career to search for oil and gas on a speculative basis, and once drilled 17 dry holes in a row. He never gave up, though, and today he’s a multibillionaire “throwback” to the great Texas energy legends.
“From 1984 to ’94, I would have been happy to count on gas at $2/Mcf,” Rees-Jones goes on. “In 2002, ’03, ’04, things had gotten absolutely crazy [with higher prices], and that’s one reason we tried to sell. We were made very nervous by this explosion in prices. Anytime you see the price of anything multiplying by five or six or seven times, you’re nervous about a bubble. These days we’re at an average of $4/Mcf, but that’s still twice what it was in the 1994 time period.”
Besides an element of luck or happy timing, Rees-Jones’ business success by most accounts has stemmed from a combination of hard work, personal integrity, steely determination, and good-ol’-boy charisma.
“He’s a big personality. He kind of has that Texas drawl, so when he walks into a meeting, people are drawn to him,” says Mike Allen, the founder and president of Dallas-based Providence Energy Corp., who’s been a partner with Rees-Jones in a number of energy deals.
“He’s also very approachable. When he comes into our office, he literally talks to everyone. That makes you like working for him. At the same time, he’s intensely competitive. He just doesn’t like to lose. So, the pressure’s on you not to lose.”
Radler of Tug Hill agrees that while Rees-Jones may be “bigger than life” and an “honest, real person,” he’s also a canny businessman.
“He’s probably one of the toughest negotiators I’ve ever dealt with,” Radler says. “He’s got his own ideas about the way things should go. He’ll say, ‘This is the way I think it should be structured.’ He’s fair, though, and, once an [agreement] is made, it’s set in stone.”
“He’s been in the right place at the right time,” another associate says. “But he didn’t stop—he did it again. So let’s put it this way: When Trevor calls, I jump.”
Just about everyone you talk with about the Chief CEO says his word is his bond, and that his handshake can be all it takes to finalize a deal. “If you shake his hand, he’s old-school—he’s golden on that,” says Allen. Adds Radler: “We’ve been partners for six or seven years, investing over $1 billion. But we don’t have any legal partnership documents—just a handshake.”
Clinching multimillion-dollar deals with a handshake was a hallmark of the traditional Texas wildcatter, historians say. But these days, businessmen like Perot contend, it’s about as rare as a 70-degree July afternoon in Dallas . “You’ve always got guys out there who will start wriggling around on you,” Perot says. “And a lot of our partners are institutions, so even if they say something’s going to get done, you’ve got committees and boards to go through before it happens. When Trevor says it’s done, it’s done.”
Chief Oil & Gas and Rees-Jones, shown in a file photo from 2008, jumped headlong into the Barnett Shale natural-gas play.photography by Scott Womack
Not everyone agrees that the Chief CEO is such a straight-shooter, however. In fact, a couple of his former investors have filed lawsuits alleging that Rees-Jones made them “low-ball” offers to buy out their minority stakes in the company.
One of those investors, D. Bobbitt Noel Jr., sold his 5.76 percent stake in Chief Holdings LLC back to Chief for $6.5 million in 2004. The other, Robert B. Allen, accepted about $8.2 million for his 7.2 percent interest in the company the same year. Both men, who originally invested less than $1,000 apiece in Chief, charge that Rees-Jones underpaid them, withholding key information leading to the company’s $2.6 billion sale to Devon two years later.
A Houston jury found in Noel’s favor in March, and a Texas state district judge entered a $196 million judgment, including $116 million in damages, against Rees-Jones and Devon two months later. In July, Houston’s 1st Court of Appeals overturned a lower court’s ruling that had barred Allen’s claims, essentially allowing the case to move forward.
Rees-Jones’ lawyer, Craig Haynes of Thompson & Knight, has disagreed with the latest outcomes in both cases, saying a rehearing would be requested in the Allen case, and that Rees-Jones and Chief would appeal the Noel verdict.
Says Rees-Jones: “It’s all very disappointing.”
In a press release announcing the Noel appeal, Haynes was quoted extolling a number of Rees-Jones’ virtues, including his “significant contributions to the community, along with his wife Jan, through the Rees-Jones Foundation.”
On that point, there’s no disagreement.
In addition to the couple’s private multimillion-dollar donations, the $325 million Rees-Jones Foundation has given tens of millions of dollars to North Texas causes, with a special focus on children and families with limited resources. Among its gifts: $25 million to the Circle Ten Council of the Boy Scouts of America, $25 million to Parkland Hospital, $25 million to Dallas’ Perot Museum of Nature & Science, $5 million to the Dallas Children’s Advocacy Center, and $5 million to the SPCA of Texas.
“Makin’ money’s fun,” Rees-Jones says, “but givin’ money away’s as much or more fun.” In the future, he adds, it’s going to be “important to shift more of our resources into our foundation.”
Separately from the foundation activities, Rees-Jones has also pumped millions of dollars into Republican political causes, supporting Gov. Perry’s re-election effort, the group called Texans for Lawsuit Reform, and American Crossroads, an independent outfit associated with GOP strategist Karl Rove. “You’re looking at a guy who is financially powerful and he’s a smart guy, and you’re lucky to have those kinds of people involved,” energy billionaire T. Boone Pickens told The Dallas Morning News. “So I think you are going to see more of Trevor in the future. It isn’t a one-off deal.”
While Rees-Jones is already plotting his next big business move [see “Fracking for Oil” on this page], he also seems to be looking forward these days to enjoying the fruits of his labor. An avid hunter and fisherman, he often repairs to the family’s Cook Canyon Ranch near Ranger, in Central Texas. To celebrate his 60th birthday one evening in August, the Eastland County ranch was the site of a party for 900 guests. Twenty-five or 30 private jets were parked on the property’s runway tarmac, Jim Francis recalls, and entertainment was provided by the Blues Brothers and the Eagles rock group. The partygoers included Dallas business titans like Pickens, Perot Jr., and TRT Holdings founder Robert Rowling, as well as actress Heather Locklear. Rees-Jones has long had a “crush” on Locklear, Francis explains, so his wife Jan good-naturedly flew the actress in for the event.
“Nothin’ makes me feel better than wakin’ up at my ranch,” Rees-Jones says. “I’m tryin’ to turn more of our ranch land into productive uses. I like finding arrowheads. I do a lot of mountain biking. I like pretending that I’m there 200 years ago.”
Such sentiments seem in keeping with Rees-Jones’ reputation as a “throwback” of sorts—as an old-fashioned man from the days when boldness, optimism, guile, and independence really did define the Texas spirit. Pointing to Rees-Jones’ wildcatting acumen, State Rep. Dan Branch has called him “a modern legend.”
“I’ve known Dan for a long time, and he’s an awfully kind man,” Rees-Jones says, when asked about Branch’s comment. “I can’t say what I am or not. But I can tell you that developing these shale plays that brought about a revolution in the oil and gas business, I’ve been awfully fortunate to have been involved. I have felt at times, throughout the last decade, like an early-day wildcatter, with a whole lot of new oil and gas left to find.”
Like an early-day wildcatter, indeed—one who may be flying about as high now as any of the historic legends ever did.