Paul Hilliard

Since founding Badger Oil Corp. in Lafayette, Louisiana, some 63 years ago, C. Paul Hilliard continues to drill the Gulf Coast, although remotely at times these days, from his vacation home in the mountains of North Carolina.

His industry credits include serving as IPAA chairman from 1989-1991 in an era when many of today’s largest independents were being formed from major oil companies’ drop-down assets as they sought new prizes abroad. His business credits also include being a founding director of NYSE-listed, Lafayette-based MidSouth Bank NA.

In 2009, he received the Horatio Alger Award—along with Steve Wynn, Denzel Washington and PepsiCo Inc. chairman Indra Nooyi. Hilliard was honored for his bootstrap success, from a humble childhood on a small farm in northern Wisconsin during the Depression, as well as for his Badger Excellence in Education Foundation, which promotes reading in at-risk elementary schools.

Currently, he keeps busy with civic and charitable programs, including the Paul and Lulu Hilliard University Art Museum at the University of Louisiana at Lafayette and as a member of the board of trustees and the executive committee of the National World War II Museum in New Orleans.

Having served as a radioman/gunner in SBD “Dauntless” dive bombers in the Pacific during the war and as a radioman in C-47s, as the war came to an end, airplanes have never ceased to interest him. Hilliard funded the purchase of a C-47 that was manufactured in Oklahoma City, deployed to Europe in March of 1944, and flew paratroops and supplies in every airborne operation in the European Theater, donating it to the museum. “We treasure that plane,” he says.

Oil and Gas Investor caught up with Hilliard, 87, via phone this summer while he was at his home in the Smoky Mountains.

Investor Paul, what takes you to the Carolinas these days?

Hilliard We spend about six months of the year here in the Smokies. I just don’t have the tolerance for the climate in South Louisiana anymore. We still have a home in Lafayette.

Investor Did you drop by the Democratic National Convention?

Hilliard (laughing) You’re not likely to find me there.

Investor Are you drilling primarily onshore South Louisiana and the Shelf?

Hilliard We’re not doing anything on the Shelf. With the regulatory environment being what it is and with the low wellhead prices for natural gas, we don’t find it economic. We’re primarily looking for oil onshore South Louisiana and Southeast Texas—any formation that doesn’t produce saltwater.

Investor Is the horizontal-drilling revolution a surprise?

Hilliard Not really. Is it going to be economic? I doubt it at current wellhead prices for gas. At $100 oil it’s economic, but, if oil prices drop, how long do those wells hold up? If you’re a public company and you’re playing the stock, maybe it works. For us, our guys all take an equity position and they don’t like it.

Investor What’s a play with which you are enamored?

Hilliard We’re not in the deepwater, but it’s amazing when you see the size of those facilities, the depths at which they drill and the capital cost. What it takes to bring that oil and gas to the surface and to market is impressive.

Investor Why didn’t the Obama administration know the Macondo accident was an anomaly?

Hilliard It’s an anti-oil bias that has been here as long as I can remember and I started in the business more than 60 years ago. Oil is such a valuable, vital commodity that the people in this country don’t think those who provide a commodity that crucial should make any money doing it.

Investor What’s the best advice you’ve been given?

Hilliard Anticipate the things you can’t anticipate and always be ready to be wrong. What happened last year is probably not relevant to what’s going to happen next year.

Investor Are you impressed with the industry’s next generation?

Hilliard Yes. I remember making a deal that wasn’t signed until three months after the well was drilled. The business is more complicated now. I’m impressed by the young people in the industry; God hasn’t stopped making smart people.

Investor Besides your work for the National World War II Museum, how do you keep busy these days?

Hilliard I read a lot. The guys at the office run Badger; I don’t have to do that anymore. They don’t mind telling me what they’re doing, but they don’t let me touch the controls.

Investor What would you like to tell industry folks?

Hilliard It’s always seemed to me very rewarding that you’re producing something that has been a great boon to mankind. I was a kid on the farm in 1934 when we got a pop-pop engine on the water pump. We didn’t need money back in those days; we needed moisture. To get that little gasoline engine to pump that water for the cows, horses, chickens, household, garden—well, that was something. Fossil fuel has done much for the standard of living around the world.

The whole petroleum industry has been a tremendous blessing to mankind and I don’t care what these goofy greenies say; they’re nuts.