Welcome back Chronicle Crew. Hope you understood the 90’s hip hop lyric in the title.
If you didn’t, no worries. My wife says I have awful jokes.
In 2011 when ConocoPhillips decided to split its upstream and downstream into two separate publicly traded entities I was probably the only person that was very disappointed by it.
Not because I thought it was a bad business decision but because I had all this data on an integrated oil company.
I still have the data on COP saved in my directory of Integrated Oil Companies rather than my E&P file.
My wife also says I have trouble letting go of the past.
If you want a good and easy to read book on the beginnings of the company in Bartlesville, OK check out Oil Man (HERE).
One thing that struck me about Frank Phillips is his company was never taken over by a larger integrated or by the money men back east.
This can not be said of all the early pioneers of the Oklahoma and Texas boom during the early 20th century.
Humble Oil was purchased by Standard of NJ.
Gulf Oil was taken over by the Mellon family in PA.
Magnolia was acquired by Standard of NY
Joseph Cullinan lost control of Texaco to money interest back east.
Even legendary oil man, E.W. Marland’s Marland Oil got over extended with its creditors in the late 1920s, which included the House of Morgan. Marland Oil spent too much building out its downstream refining and marketing and was swallowed up by the Standard Oil descendant, Continental Oil which was controlled by Morgan. After the acquisition it was renamed Conoco.
But not Frank Phillips.
The common thread among these oil companies is their exponential growth and endless need for fresh capital.
But they all ran the well dry and would lose control.
You can draw parallels to the shale companies of just a few years ago. Too much capex, poor returns - old management out, new ones in with new boards and new comp packages based off of returns vis-a-via growth.
But Phillips Petroleum was different. Before Frank started an oil company, he ran a bank financing the Oklahoma oil men.
So he understood finance.
Frank Phillips would later split his time between his ranch and Wall Street, rubbing shoulders with various high flying financiers.
The first chart is COP’s oil and gas production history.
The Oil & Gas Production History of ConocoPhillips
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