Named the 2014 “Citizen of the West” by the National Western Stock Show held in January in Denver, Frederic C. (Fred) Hamilton was selected for representing “the spirit and determination of the Western pioneer,” joining Cortlandt Dietler, Bill Coors and the Phipps brothers in the scholarship program's honor roll.

The Denver-based 85-year-old and his brother, Ferris, launched their Hamilton Brothers Oil Co. in 1953 with a $5,000 loan from their mother.By 1962, they discovered the 2-trillion-cubic-foot Edson gas field in Canada.Soon, to drill in remote locations, the independent designed a rig that could be transported by helicopter and the first floating production system, which allowed it to become first to produce oil from the North Sea.Selling its successor, Hamilton Oil Corp., to BHP Billi-ton Ltd. in 1993, Hamilton sold his Tejas Gas Corp. to Royal Dutch Shell in 1998.

Currently, the chairman of Hamilton Cos. LLC continues to drill for oil and gas and is also active in real estate and private-equity investments.In addition, his passion for art—beginning with more affordable sporting art—resulted in his 19-year term as chairman of the Denver Art Museum and his recent gift of 22 Impressionist masterpieces, including works by Van Gogh, Monet, Boudin, Cézanne, Manet, Pissaro and Renoir.

Now the museum's chairman emeritus and a trustee of the National Gallery of Art, Hamilton says of his art collection, “I love to look at art.It's something I enjoy and my friends enjoy.It's been very rewarding.” Of his work with the Boy Scouts of America, he notes that he didn't get to continue in the program past Cub Scout during his childhood in Illinois, but he agrees with Scout Law and how this and other lessons help young people.

Oil and Gas Investor visited with Hamilton in early February about his outlook for the US oil and gas industry.

Investor Did you expect industry would one day produce commercial amounts of oil and gas from shale?

Hamilton Honestly, no.We were actively engaged in exploration around the world.We didn't think shale would ever be productive.We didn't have a way to get into it and hold it open.It was a source rock.

Now, we knew fracturing; we fractured vertically—limestone and sandstones.It didn't occur to me that we could get to the point where we would get out one mile or two miles on a horizontal basis and frac it.

It's astounding and revolutionary for the world and fabulous for America.It's put us in the position of being energy independent and it's because of technological advancement and the industry's intense desire to find new sources of oil.

Investor Are there yet more US formations that may be tapped with fraced horizontals?

Hamilton In some of the older fields where you have production somewhat depleted, there are probably some peripheral zones around the structure that haven't been tapped that we can tap now.The Permian Basin is coming along now too, and there are more of these around the world.

Investor You and your brother started out with today's equivalent of about $50,000.Could that be done today?

Hamilton I shouldn't say you couldn't because someone clever will figure out how to do it.It is more difficult today; the cost differential is enormous.We're drilling $2- and $2.5-million dry holes today.Forty, 30, 20 years ago, it would have cost us $200,000 or $300,000.

Investor What advice would you give to new industry members?

Hamilton No. 1, you've got to work hard.I was a roughneck for a year to learn about the drilling business.It was a great start for me to understand the industry and decide it's something I wanted to do.

You should be an optimist and self confident.I started out with optimism and that gave me a great leg up.

When we were working in Texas, Alaska, Canada, the North Sea, China, we had to do it at less cost than a major oil company.We had a number of firsts that allowed us to be successful; what we created is being used by industry around the world.When you don't have money, you have to be creative and work like hell.

Also, you have to be honest and honorable; people will respect you for that.In our day, we didn't have contracts; your word was your bond.

Surround yourself with people smarter than yourself.I can't stress enough the importance of this, particularly when you're starting out.

And you always need a certain amount of luck.Timing is important also.But you can't get away from hard work, creativity, risk-taking, and wise advice and help.

Investor And when discouraged?

Hamilton I would tell them there is great opportunity out there.The shales have opened opportunities that didn't exist 10 or 15 years ago.I think we will learn (yet) more technical ways to get to this oil that is there.

Don't be discouraged; it's out there.You have to figure out how to play a role in it, figure out where you belong.We'll be exporting oil if we get around Mr. Obama.And Keystone will hopefully be approved in your or my lifetime.

—Nissa Darbonne

For archives of interviews with industry legends, see OilandGasInvestor.com.