Ted Collins

This past spring when Encore Acquisition Co. was sold to Denbury Resources Inc. for $4.5 billion, you would think that left Encore board member and longtime Midland independent Ted Collins Jr. with not much left to do. Hardly.

For one thing, he is also on the board of Energy Transfer Partners LP, which is building Haynesville take-away capacity with its Tiger Pipeline through northern Louisiana.

Then too, on the day we spoke, he was in and out of a data room, aiming to sell some Wolfberry properties in the Permian Basin owned by Patriot Resources Partners LLC, where he is chairman and chief executive. At the same time, another partnership in which he owns an interest, Rubicon Oil & Gas LLC, was selling some New Mexico production. It is partnering with Concho Resources Inc. in the Abo play in Eddy County, New Mexico, as is Collins as an individual.

The son of the late C.O. (Ted) Collins, one of Fort Worth’s pioneer oilmen, he left the University of Oklahoma in 1960 armed with a degree in geological engineering. It was 50 years ago this month that he settled in Midland. He started his career with Pan American Petroleum Corp., a forerunner of BP America. At the time it was the largest producer in New Mexico and second largest in West Texas.

By 1963, Collins had gone independent. Through the years he has started and sold numerous independent companies, invested in others started by friends, and has otherwise been involved in a dozen partnerships, owning leases, mineral interests or working interests.

Among other claims to fame, he was involved with the discovery well on the Rocky Mountain Overthrust in Summit County, Utah. It turned out to be 40-million-barrel Pineview Field. Still producing, it was drilled by American Quasar Petroleum Co., which he co-founded in 1969 with Fort Worth’s Dick Lowe (now head of Four Sevens Energy LLC). Collins was executive vice president until 1982.

From 2000 to 2006, he was president of Collins & Ware Investments Co. of Midland; today he is a partner in Fort Worth’s Collins & Young LLC. The latter partnered with Chief Oil and Gas early in the Barnett shale play.

In 2006, he received a lifetime achievement award from the American Association of Professional Landmen (AAPL), for his promotion of the value of land professionals. Last year Collins was inducted into the Permian Basin Petroleum Museum’s Hall of Fame for his lifelong contributions to the West Texas oil patch. We caught up with him between data rooms.

Investor: Ted, how did you first go independent?

Collins: I sold a few drilling deals and then Robert E. Tucker and I formed Collins & Tucker to do deep gas drilling and leasing in the Delaware Basin in 1967. In 1969, we co-founded American Quasar with Dick Lowe, and Herb Ware and I ran the exploration arm out of Midland. At one time Quasar was one of the largest sponsors of public drilling partnerships. But then in 1982 when Reagan changed the tax laws, there were no more public drilling partnerships.

That’s when I was asked to become president of HNG Oil Co. (part of Houston Natural Gas). That eventually became what is now EOG Resources. When my contract was up in 1988, Forrest Hoglund came on board to take it public.

Investor: Then what?

Collins: We started Collins & Ware in January 1988 and built it up to 95 employees. We had nearly 1 Tcfe (trillion cubic feet equivalent) and operated about a thousand wells. But we sold it to Apache for about $312 million in July 2000.

Investor: You’ve done a lot in the shales.

Collins: I sold Continental Resources their first Bakken acreage in Montana in 2002 or 2003. They took three-fourths interest in 19,000 acres we put together in Richland County, and we kept 25%. It was early in the Bakken play. We showed it to Harold Hamm, but he didn’t want it, saying there were too few reserves and well costs were too high. But during a bird hunt in South Texas we met again and I asked him to reconsider. He flew out to Midland the next week, we met at the airport and shook hands on a deal. It turned out pretty well.

That’s what I like about the business: You can shake hands with a guy and know it’s a good deal.

Investor: You’re still in the Barnett too.

Collins: Right. Collins & Young (partner George Young Jr.) still has some acreage there and we’re in some wells with Devon because we had been partners with Chief Oil & Gas when it was bought by Devon. And, we were also part of that deal under the Alliance Airport, with Ross Perot (Hilcorp) and Chief. That production was sold to Quicksilver Resources Inc. for $1.3 billion in August 2008.

Investor: You’re quite the deal-maker.

Collins: Well, I’m a small operator but I’m in a lot of deals. I’ve been around for 50 years, so that’s where it starts. People see me at the (Midland) Petroleum Club or on the street and they call me with new ideas. Every time you think the party’s over in West Texas, there’s a new play. This basin keeps surprising me; it always comes up with something that gives it new life. Its long-lived reserves stick with you. I’m lucky to do something this much fun. I love the activity.