Rumors abound that iconic Midland oilman Ted Collins Jr. held a 10% stake in every deal done in the onshore U.S. for the past 50 or so years, and no one has come forward to dispel those reports as yet. While a humorous hyperbole, the reality is that Collins participated in an inordinate amount of oil and gas investments simply because he was trusted by so many people in the industry and he made it his mission to help those who had a good idea but needed financial backing. He was widely known as “Ten Percent Ted” for his penchant to stake 10% of a land or drilling deal, which usually motivated others to come into the deal as well.

Collins died unexpectedly in late January. He was 79.

“The oil and gas industry has no better friend than Ted,” said former U.S. Commerce Secretary and oilman Don Evans on a video tribute to Collins at an Oil and Gas Investor event honoring Collins in November. “Ted has more friends within the oil and gas industry than anyone I know. His friends range from CEOs of major corporations to the young landmen, engineers and geologists.

“When you deal with Ted, all you need is a handshake or his word. His successful career has been a result of his unquestioned character and integrity.”

“Ted never met a stranger,” said Mike Grimm, who first partnered with Collins in Midland in the early 1990s. Grimm is chairman of RSP Permian Inc. and a director of Energy Transfer Partners. He is best known for building five different Rising Star companies, the predecessor of RSP Permian. “Ted made everybody feel like they were his best friend. He garnered a lot of trust from folks and that put him in a lot of deals in most of the basins across North America.”

Grimm said Collins’ ubiquitous involvement in so many deals became a running joke among friends.

“We’d hear about a new well coming up in the Marcellus, and somebody would ask, ‘Does anybody know anything about that?’” said Grimm. “Ted would say, ‘I know about it; I’m in that well.’ Or what about the Scoop/Stack? ‘What do you want to know?’ he’d say. ‘I’m in that with so-and-so.’ It was over and over. It didn’t matter which state.”

Ted Collins Jr. shares his wisdom and insight on a panel of legends at Investor's A&D Strategies and Opportunities conference in 2011. Charlie Stephenson, background, joined him with Forrest Hoglund, not pictured.

Early entrepreneur

Collins was raised in an oil and gas family. His father, Clyde Otto “Ted” Collins, is famous for filing the very first oil and gas lease in the Lea County, N.M., courthouse. Ted Jr. graduated from the University of Oklahoma in 1959 with a geological engineering degree and went to work for Pan American Petroleum, a forerunner to BP America, in West Texas. He later formed American Quasar Petroleum Co. with various partners, including Herb Ware, which became the largest publicly traded drilling fund in the country.

In 1982, Collins joined HNG Oil Co. as president, which would later merge into Enron Oil and Gas, known today as EOG Resources. In 1988, he teamed up again with Ware to form Collins & Ware Inc., a company that grasped the new 3-D seismic technology.

“Ted was very successful when we were doing the 3-D craze in the ’90s,” said Grimm. Whether it was in Montana, Texas, Oklahoma or Kansas, he was all over the place in those.”

At Oil and Gas Investor’s A&D Strategies and Opportunities conference in 2011, Collins recounted his best deal as an acquisition of West Texas assets being cast off from Amerada Hess in 1995 for $60 million. “They only had an engineering report” to value the properties on, Collins said, so they went to Hess’ office in Seminole, Texas, to look at well files. “There were a lot of hidden gems in these assets,” he said, and called them a sleeping giant. “With 3-D seismic, you find that a lot of these reservoirs had been missed.”

But Grimm identified Collins’ magnum opus as a deal that occurred later and which involved Grimm too. Collins, Mike Wallace and Grimm partnered on a venture to drill the first vertical Wolfberry wells in the northern Midland Basin, “and they were a lot more successful than we ever thought they would be.”

Ted Collins Jr. on site with Oasis Petroleum Inc. in the Bakken Shale. Collins served on the Oasis board.

That led to the formation of RSP Permian Inc., which “we started on a shoestring.” It ultimately went public in 2014 for $166 million. Today it has a market cap of $5.7 billion. “Ted was the largest shareholder in that. He started on not very much money and his stock ownership is in the millions of shares. That was a very good deal for him,” Grimm said.

Changing strategy

Brett Smith is the son-in-law of Collins’ 35-year partner Herb Ware, and Smith has shared 35 years himself alongside Collins.

“He’s like a father, mentor and friend to me,” said Smith, who is president of Rubicon Oil & Gas LLC and on the board of Sunoco. Collins owned 20% of Rubicon I when it sold to Chesapeake Energy Corp. in 2005 and is a 20% shareholder of the current Rubicon II. “Ted was in everyone’s deal,” he said. “There wasn’t hardly a guy Ted didn’t know or take a deal with.”

After he sold out of Collins & Ware in 2000 to Apache Corp., Collins decided he didn’t want to get back into day-to-day operations, Smith said, and instead began his practice of taking about 10% of deals he liked. “If it was a good looking idea, he’d take 10% of it,” he said.

As an example, in the early days of the Bakken Shale, Collins bought into a 10% position with Harold Hamm as Continental Resources Inc. was building its original position, and he still holds an interest in about 195 wells there, according to Smith.

“Ted backed a lot of people just because he liked them. He put up a lot of money to help people get started, and he had a big impact on lots of people’s lives,” said Grimm. “We referred to him as the BOT, the ‘Bank of Ted,’ because he invested in so many people.”

Another long-time Collins partner felt that life-changing impact early on. George M. Young Jr. was the grandson of the namesake for the Marshall R. Young Oil Co., where he worked in the family business in the 1980s. He knew Collins through various visits when he and partner Ware would come to Midland selling drilling deals. But it was in 2000 when Young ventured out on his own and sought Collins for financial backing.

“He backed me on a virtually unknown lease play at the time called the Barnett Shale. I had an idea to go buy leases and I needed a backer. Teddy just said, ‘Well, you’ve got one.’ We made a deal on the back of a napkin after a golf game, and the next day I was out buying leases.”

Oil and Gas Investor honored Ted Collins Jr. at its Executive Oil Conference in Midland in November.

That venture led to the formation of Collins and Young LLC, which partnered with Trevor Rees-Jones’ Chief Oil and Gas in the budding Barnett. That asset compilation ultimately sold to Devon Energy in 2006 for $2.2 billion and to Quicksilver Resources Inc. in 2008 for another $1.27 billion. “We had a remarkable run,” Young said. Collins and Young remains an ongoing entity.

“I’m one of the many people that Teddy reached out to with a kind word, a bit of advice or backing for an idea that others might not have cottoned to,” Young said. “He touched thousands of lives in our industry. He had a keen business sense and a remarkable way of sensing people who had potential and just needed a little help.”

Young and Collins partnered in a second idea with Silverback Exploration, which amassed leases in the Delaware Basin. That entity sold to Centennial Resource Development for $855 million in 2016. Their latest venture, Pegasus Resources, formed in November 2017 to buy minerals in West Texas. “It’s blowing and going,” said Young.

Influencing lives

Smith said Collins’ highest influence on the industry was his ability to pay it forward. “He was always trying to help the little guy who was getting started in the industry. He would take a deal from a landman who came in off the street and needed to sell some minerals. Ted helped a lot of young land guys by putting up the money to get their leases bought so they could get a well drilled.”

“There wasn’t an arrogant bone in his body,” Young added. “He was always grateful to those that had helped him along the way, and I think that’s what drove him to help others. When we’d inquire about how to pay back all the wonderful things he had done for us, he’d say just pay it forward and help out some youngster in the business that needs a hand.”

Honesty and integrity were the two traits that best characterized Collins. Grimm remembers the hectic heydays of the onshore 3-D seismic land grab in the 1990s, in which he and Collins partnered on a number of multi-million dollar seismic acquisitions and wells. “There were two or three of those occasions we were going so fast we never signed a contract. We did everything on a handshake.”

That never concerned the two until the time of sale, when the acquiring company’s lawyer wanted some proof of ownership. “I called Ted and said we needed to put together at least a one-pager. We spent millions of dollars doing deals on a handshake. He was one of those rare cats where his word was definitely his bond.”

Collins’ son Patrick, who runs Cortez Oil & Gas in Dallas, remembers his father’s best advice: “Stick to your word; your word is your bond. Always do exactly what you say and never retrade or change a deal. I just try to live up to the man he was,” he said, “which is a pretty high bar.”

Even approaching 80, those closest to him said Collins never talked retirement and was always searching for the next deal. “The day before he died, a geologist that worked for us at Collins & Ware had a Smackover deal in Louisiana he was trying to finish up,” Smith recounted, “and sure enough, when I looked at it, Ted had taken 10%. He was still taking deals up to his last day.”

The most telling aspect of Ted Collins’ life was how others viewed him, Smith said. “In all the years I’ve known him, I’ve never heard a single person say a bad word about Ted.”

“I just call him partner and friend,” Young said. “I’m the luckiest guy here” for having known him. “I’m going to miss him terribly.”