Big Oil Sells Wells in Exchange for ESG Points: Texan Buys Them All, Makes Billions
A Texas businessman scored big — billions of dollars big — by buying aging oil wells with low environmental impact scores.
From 2020 to 2023, Hilcorp Energy CEO Jeffrey Hildebrand’s net worth rose by an astonishing $8 billion, according to Forbes.
Going forward, Hilcorp aims to increase its oil production by 500,000 barrels over the next three years, which would result in the company becoming a top 15 U.S. oil producer, according to a report Tuesday in The Wall Street Journal.
Hildebrand’s recent success comes courtesy of environmental, social and governance investing.
According to Investopedia, ESG “refers to a set of standards for a company’s behavior used by socially conscious investors.”
Those standards include how climate-friendly a company’s policies and procedures are, along with how it interacts with employees and the surrounding community.
The social aspect considers whether companies “promote ethical and socially conscious themes including diversity, inclusion, community-focus, social justice, and corporate ethics, in addition to fighting against racial, gender, and sexual discrimination,” Investopedia says.
Over the past few years, as ESG has become more prevalent, major oil producers have begun selling off assets not deemed to be environmentally conscious, including aging oil wells that leak excessive amounts of methane into the atmosphere, the Journal reported.
But Hilcorp is privately owned. With no investors to answer to, Hildebrand isn’t worried about spoiling his company’s ESG score.
Moreover, the Texas businessman is well-known for his fixer-upper business mindset, which has led to his company’s overwhelming success.
Friends describe Hildebrand as detail-oriented and “obsessed with efficient.”
This goes back as far as his days as a doughnut shop owner when the Texas entrepreneur “sampled kolaches from more than a dozen shops to find the optimum flavor” for his own products, the Journal reported.
The billionaire’s Christian faith sheds some light on where this tenacity comes from.
According to his friends, Hildebrand often quotes his favorite Bible passage, from Luke 12:48: “To whom much is given, much will be required.”
With this mindset now pointed at the oil industry, Hilcorp has bought up $9 billion worth of aging, ESG-hostile oil assets from companies such as ConocoPhillips, BP and Exxon Mobil, the Journal reported.
That isn’t to say Hilcorp lacks any hint of environmental consciousness.
Hildebrand told the Journal his company has reduced its methane emissions by 35 percent over the past four years.
However, without ESG scores to worry about, Hilcorp will likely continue to buy up such assets in hopes of meeting Hildebrand’s ambitious goals.
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