#341 - George Young - CEO @ Pegasus Resources - Stories From an Oil Legend

Chris Powers: George, welcome to the show.

George Young: Thank you, sir.

Chris Powers: For anybody listening, I've known George a long time. We've been good friends. And back when I was a peon neophyte, I'm still a peon, maybe not a neophyte anymore. We worked together for three or four years and became even better buddies. So today's going to be about as entertaining as they come.

And it was an excellent place to start. Let's start with the cook ranch, and then we'll dovetail into your early days, but sure. Let's talk about the cook ranch in Albany, Texas.

George Young: Okay, we're back to 1924, and my grandfather, Marshall R Young, was working for a company called Rosier and Pendleton, and he had met Charlie Rosier, who was the principal in the First World War, and they became friends, and granddad had a background in oil and gas, Mr. Rosier didn't. Granddad had an eighth-grade education and drove a production superintendent for the Husky Oil Company up in Kansas. And his only job was to drive the superintendent around to look at all their wells. Well, The superintendent tragically passed away, and nobody else knew where all the wells were except for my granddad.

So, at 17, he became the production superintendent for that area of Kansas because he knew where everything was and could drive. So fast forward to post-World War One, and Charlie and a guy named Tall Pendleton, another Fort Worth-based fellow, started a company, Roser and Pendleton.

And they managed to get a hold of a lease out in Albany from Mrs. W I Cook, and her husband had passed shortly before that. So about 26,000 acres north of town, and they made a deal, you know, great 8th royalty deal, probably paid her two an acre or something, which was a bundle and proceeded to start drilling exploratory wells.

And there was minimal production anywhere near there. Breckenridge had already been discovered, the Breckenridge field, but the. Keep it from belabouring on the Cook Ranch, a rocky, hilly, ravine-covered property that didn't have a single mesquite tree in 1924. Now, the whole area is covered in mesquite trees.

It was just an open prairie; buffaloes roam there. So, back then, the drilling rigs were old cable tool rigs, which didn't have a rotary component. They were moved with oxen. And so they had teams of oxen to drive these rigs and all their heavy equipment. So, they had drilled four dry holes in a row, and these wells, only going to 2,000 feet, would take months to prepare because you're chipping away at the rock with a cable tool rig.

And so on there, after their fourth dry hole, they had moved around, and they had a geologist who kept claiming, Oh, this is going to be the one. And they're about to drill their fifth well. And the tool pusher on the rig said, all right, where's the next flag? Meaning that it was if they state the next well.

And so one of his team members sets up on top of that hill boss, and he looks at it, there's no roads, nothing. And he starts looking at that canyon that he's got to go up, and the team member looks over at those oxen and looks at that rig that team member is called to pull over, and that team member goes and tells that hand, he said, run up there and get that flag and bring it back down to me.

And the hand thought, okay, so he went up there and pulled the flag with the little orange flag on it, brought it, and handed it to the drilling superintendent. There was a nice flat spot right there. The superintendent goes, we're going to drill this one right here. And he jammed that into the ground, so they did.

They drilled the well right there, and it was probably two thousand feet from where the geologists had said to hit. And it would be their last well because they had a certain amount of money allocated, and that was it. So, they drilled the well, and lo and behold, they hit their first pay sand at 800 feet.

And it came over the cat heads at them and blew out. It was a huge discovery. It became the Cook Ranch field, which is still there. There are still a few wells producing out of there, but that Discovery set that part of the world on fire and led to multiple other discoveries. However, the growth in that county started at one point.

Roser and Pendleton was the largest employer in several counties, with 600 people living on the ranch and oil field housing on the place, gasoline plant, and refinery. It had produced 50 million barrels. Granddad bought Roser and Pendleton. You know, after that, they went and drilled a lot of different places, but Discovery set things off in central Texas, and it was by chance.

That is the best part of that story. And we'll move on. About five years later, they drilled that fifth well's original spot, a dry hole.

Chris Powers: And if you're in Fort Worth, where my daughter was born, there's probably the leading world-class children's hospital, maybe in Texas, maybe there's something in Houston.

That's good called cook children's. Is there any connection between the cook ranch and cook children?

George Young: There is sweet Mrs. W I Cook with a benevolent heart. She didn't live much longer after the Discovery, but as you can imagine, Once I found oil out there, it was like a madman with an ice pick.

They drilled everything they could as quickly as I could. And before long, it produced Buku oil, and she was getting an eighth of every barrel that came out of the ground. And what was the oil trade for back then? Fifty cents, two bits, whatever, but it was a lot of money. So, she created a foundation, and she donated. Hopefully, I get this right.

She donated, and her money went to establish Fort Worth Children's when she died. No, pardon me, there was already a Fort Worth Children's Hospital, which is over here in Lancaster, two blocks away, and is the old Fort Worth Children's Hospital. It sits there right behind the Masonic Lodge. Well, she created a competitor, so to speak, and the Cook Children's Hospital. Later, 30 or 40 years later, the two merged when it was apparent there was no need for two.

And so that Discovery that Charlie Rosier, Tal Pendleton, and my granddad, who was their eighth-grade educated drilling guy, found out on the Cook Ranch created arguably one of the most prestigious and capable children's hospitals in the country. And the last part of that story, I'm probably 2008 or 2009 when we sold our Barnett production, the last part of it.

And I was asked by Rick Merrill. He was the current CEO to join the board. So, at my first board meeting, we were visiting before it all started, and I looked at him, and I go, Rick, do you know that I have a connection to Cooke's? He said no, and I told him that story. And I said my granddad's company discovered oil on the Cooke ranch, which became the endowment for this hospital.

He's blown away. And as it turned out, I was the first and the only young to ever serve on that board. And I served for seven or eight years. I loved every minute of it; it was a great spot.

Chris Powers: I mean, my daughter was born 14 weeks early. That hospital saved her life. So thank the man who moved the flag, whoever he was.

George Young: I know who the guy who surveyed was; you remember in my office that old transom with a surveyor tool on the top and the old wooden three-legged tripod. That was the transom they shot in very well until about 1980 on the Cook Ranch. It was surveyed and shot by Vaughn Moore. I know that. And Vaughn was probably hot under the collar when they moved it, but that's funny.

Chris Powers: All right. So Cook County happens, your grandfather buys them, and then what starts to happen and marries it in with how you start getting in the biz.

George Young: Lots of cool things happen. Roger and Pendleton was one of the leaders in a lot of things.

They put in the first water flood. Arguably, other people take credit for the cook, and they produced two grains of sand out there, about one at 700 feet and one at 1200 feet. So that 50M barrels I've told you about came from about as far to the end of the parking lot, not very deep.

They tumbled along and did well and found oil in other places. Granddad took the company private in 1952; it was on the old oil exchange, which became the American Stock Exchange, now gone. It's all been rolled into the NASDAQ and New York Stock Exchange. So, Granddad, the number was 30 million in 1952, which he bought the company for. Here's a guy who didn't get out of them; I think he got out of the eighth-grade kind of, but he was very well-read, and he borrowed every nickel he could in Fort Worth and had to go to Dallas to get the last 10 million. He was a good friend of Eamon Carter's, and he was, you know, totally against having to earn money from Dallas, but he held his nose and got robbed by all the banks.

He could be over there. So he buys it, and Granddad always considered himself an oil producer. He wasn't a wildcatter; many of his brethren and contemporaries at the time, such as W. A. Monty Moncrief, H. L. Hunt, Sid Richardson, and many names you recognize around here. Those guys made much more money than he did, but they risked everything.

I mean, they used to say about Mr Richardson, half of his career, his office was the Richelieu grill down on Throckmorton at the pay phone because he was broke more than he was rich, but he died rich, very, very rich. And Granddad was never much of a wildcatter. So when you started getting into the sixties, I was born in 1959 in Brookhaven, Mississippi.

By then, the West Texas element of Roser and Pendleton, now Marshall or Young Drilling Company, had pivoted to the Gulf Coast. And we had ten land rigs in Brookhaven, a little town 60 miles south of Jackson. And so I was born in 1959, right in the middle of the civil rights. Awful things that occurred in the South that I'm not proud of.

And we were Lincoln County, Mississippi's largest employer, particularly Brookhaven. We had ten land-based standard derricks and steam rigs, and a standard derrick required a crew to build the derrick, a crew to take the derrick down, the same crew, and then a crew to drill. So, they were antiquated; I mean, they made suitable holes; these were big triples, and they could guide to 14,000 feet.

The problem was that those old rigs became hard to make money with as technology improved. And, so, I was born in 1959. My dad's out on a well, and he gets a radio. They had radios on the rigs, but a message got to him: he was down on the Jordan River. Down almost on the Gulf Coast, his wife had had him a son. He wasn't in Brookhaven, so he got in his car. He had two wrecks coming home and arrived the next day to see his firstborn son.

He had two daughters. So, in 1966, all those rigs were just so old-fashioned, and the handwriting on the wall, they sold those rigs for what we call pig iron, meaning they sold them across the scales. Those rigs weren't worth anything; some of the prime movers in the engine still were, but the rigs were worth what they would bring across the scales, you know, 10 cents a pound.

So we moved to Fort Worth, and I had a wonderful childhood. My parents, who loved me, had four siblings; we were almost a middle child of five and couldn't have been blessed with a better upbringing, and for that, I'm so grateful, but my dad wasn't around much when I was little. I used to go out on rigs with him from about six, so my earliest memories were being around drilling rigs. The family got fortunate in 1970 when they were lucky enough to own some leasehold in the panhandle of Florida.

And that, along with the Moncrieff family here in town, became what is known as the Jay Field. And it was the most extensive Discovery in the lower 48. The only thing more significant was Prudhoe Bay. And it was a 600 million-barrel oil field, and we just had a little child's portion, but it was enough.

So that got a little, I mean, I saw that happening and, you know, listening to dad talk and, you know, I learned a lot from him, but one thing I learned about was the excitement of getting that call in the middle of the night or early in the morning. Dad would come down with a snap in his garter, and we hit a big one. So, it got in my blood early.

Chris Powers: All right. So it's in your blood. When did you move to Texas?

George Young: 1966. And it was traumatic. My mom was a Brookhaven girl.

Chris Powers: And your mom lives in Shady Oaks, right?

George Young: She does. She just passed away.

Chris Powers: I'm sorry.

George Young: That's okay. She lives three or four houses down from your in-laws, and she just passed the day before Thanksgiving, so thank you for asking about her, but she was a Mississippi girl.

And on her honeymoon, they went to New Orleans, Nolan's, and it was the first time she'd ever stayed in a hotel room. And she was 22 years old. She'd never been in a hotel. She took her towel. Dad goes, Diane, why did you get a towel in your suitcase? She goes, well, I have to dry off stupid, and he says Honey, they have towels.

And she didn't know, but so we moved here. I started at North High amount and then moved on to Arlington Heights Elementary, which is no longer operational. And then, in the sixth grade, I went to the fourth country. So I met a lot of people, a lot of whom I'm still friends with from all three schools and then graduated, went to the University of Texas, and turned down an opportunity to go to Washington and Lee; it was probably a mistake; it was a great school.

Chris Powers: What were you going to do there?

George Young: Study geology. But I went to Roundup in the spring of my senior year. The visuals on the young ladies down there just sucked me right in. I was done; although I did well in high school and was bright and very verbal, I could have been better with math.

Geology may not suit me, but I only lasted two years at the University of Texas. I played a lot more than I studied. After those grades came out for the second and fourth semesters, Dad said we must rethink this. So, I returned to Fort Worth and coached football for two years; it was my most excellent job ever. I coached out at Fort Worth Country Day at my alma mater and got to coach my little brother Marshall, who was playing my old position, middle linebacker. They went eight and two that year, and that was so fun. And then I realized that the five an hour would provide little beer and cigarette money.

So I should get a different job. And so I got a job with the family business, went to Oklahoma, ran title, learned to be a Landman, and got shipped around East Texas, West Texas, mostly Oklahoma. I was blessed to know to run the title in Oklahoma because it was much easier than being brought out in East Texas.

So that was great, and I got a taste for the business before long. I wanted to drill wells. I wanted to learn how to do that. And, since it was a family business with 250 employees, I could hide anywhere. And so I started gravitating towards drilling and production. Since I didn't have a degree in engineering or formal training, I learned it the way Everybody else knew it back in the old days. They throw you out there in a drone rig, and you sink, or you swim, and you have to drive.

Some, I remember the earliest wells I set, I'd have to drive five or 10 miles to the payphone to be able to call back into the office to tell them what was going on because the radios the rigs had went back to their base of operations. So there were some scary moments; we fought some blowouts, and by then, we had cell phones, so I could get instructions from the guys who knew what to tell me to do.

And, but that's how I learned it, and I'll always remember that training. It was the best. And so I'm a landman. I want to be drilling on the side of it. I wanted to learn all of it, so I did. 1 of the great takeaways from the early 80s that a lot of people don't realize is that you see a lot of M and A and consolidation going on right now in the energy business and pioneers getting bought by Axon Mobile.

You got Oxy's buying crown quest and, you know, Bobby Floyd and those guys are all good friends of mine. Endeavour sells all those who are buying Endeavour Diamondback, Travis Dice, and good friends. All these things happened out in the Permian before that. When I entered the business in 1982, two dozen major oil companies were everywhere.

They weren't all technically vertically integrated majors, but you had Exxon; it was humble before it became Exxon. You had Arco Atlantic Ridgefield, you had Sinclair, you had Amoco, you had British Petroleum, you had Tenneco, you had Marathon, you had all these companies, and they controlled the business, period.

The little independents like the Marshall R. Youngs and the Moncrieffs, hey, we all did well. But we couldn't hold a candle to those guys. One of the most incredible things that I saw, which would lead later on to help me create a fortune, was that there was a role played by usually a Landman at every big company in the business from the forties through the mid-eighties. And that was the oil field scout.

Chris Powers: Okay. What was that?

George Young: He's a spy. Call it what it is, maybe CIA, man. It was to get information, bring it back to your superiors, and keep your mouth shut. And, the last of the great, I haven't been in touch with him in years. I hope he's still with us, but he wasn't much older than me.

Great guy. He was Tom Robertson from Bobco, Bass Enterprises, the Bass families and Bepco. Bass Enterprises Production Company, but he was so good at his job. And he was trained at Tenneco, and literally, a well could be drilled anywhere in the United States of America on a Wednesday. And by the following Tuesday, he will also have the log for that.

His reach was that broad. So when you wanted to know what was going on in Pennsylvania, or what was the new play in Utah, or what was going on in West Texas, you had your scouts go out there with binoculars and count how many stands were coming out of that derrick, you know, how deep they are. That made it during the East Texas field discovery because nobody knew you had a well drilled at Longview and another well down here. Nobody knew that there was a giant oil field in between the two. And that was how it all happened. That was arguably the most significant oil field ever discovered in Texas.

Chris Powers: So you're telling me drilling info wasn't around in the 80s?

George Young: No drilling scouts where you're drilling info and they fed the machine and, you know, so you trusted them, you know, and Tom was dear friend, he'd call me and swab me for stuff, you know, it was great. So, I ended up leaving college after two years.

Go to work in the oil field for me was as a landman. I mentioned that earlier because the pyramid's base is in the oil and gas business island. Nothing happens without land, and so many people don't realize that it's so important. You must drill a well with a lease. You can't only do something with a lease.

Fortunes have been made buying and selling leases, and finding oil is very difficult. And one of my dear, dear, dear friends and mentors. I'm going to talk about a lot over the next hour. Teddy Collins was born and raised in Fort Worth but spent most of his life in Midland. He always said to me, You know where most of the oil and gas in the world has been found?

I started thinking about the Middle East and West Texas, and he said no. So it's been found at the altar. And that was some excellent advice. Because there's the hard way to get rich and the easy way to get rich, but they both still get you rich. And he had a lot of little quips like that.

So, I got restless working for the family. I want to do my own thing. I, you know, have never been satisfied and have played a lot of golf. I used to be able to beat you. I think the best I ever got was a handicap. I could play, though, but not anymore. But I got restless, and luckily, I met the love of my life.

And when 1985 Linda Bird, I was, that's what I was coaching football, and I was starting to get in the oil business. Luckily, I was working through the Kappa house at TCU and found her early on. I had one date with her and never had another date with anybody else.

I fell head over heels in love with her, and we're still married 38 years this fall. And I have two wonderful kids, Georgia, third and Kiki, Georgia, third works with me. Now that he did a stint with JLL, it's funny. My daughter works at JLL. And no, I'm getting restless, and, you know, we feel like we're stuck in a rut over at Marsh. By now, it's Marshall, our young oil company in the eighties, nineties, and 89. I'm ready to do something else, but I stick around.

I went and sold insurance with New York Life for a while, but I came back to Marshall our young. That's where I got my chops, and that's where I learned the business was in the nineties, and I became our VP of production. I had that experience with drilling rigs and workovers and completing wells.

And so, several family members are there when 99 rolls around. My kids are 8 and 6, and I need to make more money.

Chris Powers: What year is this?

George Young: In 1999, I lived. I was on a shoestring and lacked trust funds. Somebody should have remembered. I don't know what happened, but I decided to go out alone.

So I did. And I went to Garvin County and had a briefcase. And not much else.

Chris Powers: What was in the briefcase?

George Young: Probably a map or two, and maybe stole some pencils, yellow markers, stuff I might need, but anyway, I opened a tiny office with my long-time assistant, Stacey Thomas, down at the city centre.

Put together a 3d shoot up there, and we'd done a lot of 3d at martial arts young, one of the early movers out in West Texas shooting 3d, but it was the only way to find bumps and structures and all picked over areas. So I had terrible luck, and I got carried through all the shooting, but I had to pay my way on the drilling.

And so I drilled two dry holes and was out of money.

Chris Powers: So, did you raise money to do that?

George Young: Oh, hell yeah. And I've been raising money for previous ventures. You know, I had people I'd walk into their office, and they'd roll their eyes. I know, but I learned that you have to suit up and show up, and if you're convicted, people will trust you.

One of the greatest lessons any man can take away from any business venture, and you're a perfect example, is that your reputation is everything, period. You smirch that one time. And doubts go into people's ears. You do it over and over and over, and you better find something else to do. And the oil business is very, very close.

Chris Powers: I have. I'm not even in it anymore, but I'm around it, especially in Fort Worth, Texas. And Will told me when I called him, he said, your mantra in the office is. It's something about telling me fast. Tell me good news. Tell me the bad news; tell me now what it is.

George Young: Yeah, tell me now. I don't care if it's good or bad. I want to hear it right now. And bad news first, lousy news second. I don't care. Don't hold out on me. You know, I don't want to hear something. Thirdhand, after the whole floor, knowing that something's gone sideways, I'm the CEO.

My job is to create a culture compatible with our people. Tactician, not really. I hire those people. They are much better at geologists. I've got geologists, engineers, FinTech guys. I got finance, guys. I got CFO and president. That's their job. I can't do all that anymore, and I don't have enough horsepower left up here, but I'm sure to hire people.

And that's why I got interviewed once, and they said, what's your strong suit? And I said, putting good people together and reading the room. I can read a room as well as anybody, but I've made a few mistakes when finding good people. I've hired some people that didn't work out. You have to; you know how it is.

God, they look great on paper, and you interview them, and, you know, they play golf and come back a month later, and they aren't working out. And so, as my Walker Montgomery, he trained me in field engineering work out of Midland. He was rough and gruff and came out of Amoco, and he would say, well, we were talking about a particular employee that day who lay down and had yet to do what he's supposed to do for a while.

He said he better watch out. I said, what happens then, Walker? I knew what he was going to say. I said he'll walk down the road, kicking rocks and pretty funny stuff, so we get married.

Chris Powers: You drill two dry holes, and you have empties.

George Young: Yeah, drill two dry holes. I got empties. But here's the funny part: I'm driving. Remember the tornado they hit on the seventh, or I was coming. We were shooting that three days when that tornado came right behind your office and hit the Malik tower, and it touched down at first in Monticello. I had four siblings living there, and I got this call from Linda that started with We're all okay.

And then that's when I knew something terrible had happened, and I said, okay, you're okay. But what happened when Linda tells me the tornadoes hit and my office got some damage, but I'm driving back and forth from Garvin, which is Saint, which is Paul's Valley, an hour and a half from downtown Fort Worth or so a little bit further at 90, which is what I drove, but I made it back in about 40 minutes that day.

But anyway, well, almost Everybody survived the terrible tornado. But as I'm coming back, sometimes I drive around at midnight. Sometimes, it'd be 3 in the morning, and I would get back to my family. I'm looking off when I get to Denton, and I'd look off to the right. Southbound on I-35, with lights everywhere, and I'm going, what in the hell?

And they were drilling rigs. I've been around the old patch long enough. They were all drilling rigs; I'd see 50 or 10 or how many, whatever day it was. And so I ran across a dear friend, still a dear friend, Larry Brogdon. And I didn't. When you were at TCU, they had not started; he was 47.

And you ought to interview him. He's just unbelievable. I ran into Larry somewhere, and Larry had been a geologist for many different companies, just the most fantastic guy in the world. But he had been following this phenomenon, which was the Barnett trail. He put together a symposium on The Barnett Shale with the Geological Society of Fort Worth, and I'm not kidding.

It was such a poor boy and an old-school one. Maps were nonexistent. There was no GIS invented at the time; maybe the government was doing it, but there were just terrible mapping services in the Barnett because the Fort Worth, that part of the Fort Worth basin, most of it had never had a well in it.

So there was very little; it almost looked like they put that original little flyer with crayon together for the Barnett Shale symposium. I'm not; it wasn't, yeah. Tell them I said that he'll hear this. He'll give me, you know, what Larry if you're listening; I know you didn't use crayon, but it was close. It looked like a crayon. So I attended that, and I went, oh my God.

Chris Powers: Did Everybody in the room that day? Or did you see something delicious?

George Young: I did, but there was a smattering of locals; the Walsh people had someone there. Tax land had someone there. There were only about six oil companies in Fort Worth at the time.

Chris Powers: And what year is this?

George Young: 1999, so this is like early 1999. They even called Larry and said there was no fracking yet. It was it, but what was happening was Mitchell Energy, old George Mitchell, who had leased everything in Wise County and most of Denton County, pardon me. You're all right. Had found they drilled the, what was the name of that sand they had up there that they were shooting?

Oh, it's escaping me, but they had a hell of a gas field up there, but it was above the Barnett, and most of that gas went to the city of Chicago. So there was pipe up there that would get it north up to Chicago. And then one of his staff members said. Man, all this gas up here in these sandstones and some of these little stringers we've got was sourced by the Barnett Shale, which was, you know, another thousand feet below.

Some bright guys were there, including Nick Steinberger, who worked with four sevens. Nick, a good friend, came up with the idea of, let's see if we can fix a reservoir. So they just drilled a well, perforated it, and fracked it. They made a little gas over the years and refined their techniques.

And these are vertical wells, and Nick Steinbrenner gets full credit for the slick water to frack, which you probably heard spoken about, which is very, very just fresh water with some treatment chemicals in there to keep it from causing your clays to swell. It had some polymers but could only carry about one to two pounds per gallon of sand.

So they'd use natural fine sand, 100 mesh sand versus 40 mesh, 60 mesh, and 80 mesh. And they started experimenting with it and found a way to commercialize those vertical wells. That's what Larry Brogdon saw, and that's what I was seeing at night. And I started driving up there after my second dry hole in Garvin County; I didn't have a whole lot to do, and I found, I remember I saw a Mitchell Energy frack crew on a well, and they had 200 frack tanks that each held 500 barrels each on a hill fracking and had all this, Halliburton iron out there and probably 30, 000 horsepower of Halliburton Iron and they're fracking a Barnett.

Well, so fast forward, so 2000 rolls around. I'm starving to death. I don't know what I'm going to do. And it's late 2000, maybe August. I'm up at River Crest. I'm playing golf. And here comes Teddy Collins, just a legendary oil man for Midland. And we called him 10 per cent Ted because he was.

So OCD about many things, but mostly about, Hey, you got a deal? Let me see it. I'll take 10 percent of it. He just couldn't; he came in with a deal unless it was written on the back of an envelope. Some language he didn't couldn't read, he'd take 10 percent of it. So he and I ran into another River crest, and this was one of the God moments for me, and I knew he'd gone through some tough times.

He had a company called Collins, and where Ken Lay had hired him Houston Natural Gas, that was Enron. He was supposed to be the first CEO of Enron. And Northern Natural Gas merges with Houston Natural Gas to create Enron. Ken Lay did that. Teddy just wasn't the right guy. He said I needed to go back to Midland.

So they hired Forrest Hoagland, who you may have heard of, who raised most of the money for the Perot Museum in Dallas. Forrest was a great CEO. They took it public. It was Enron Oil and Gas. When Enron went bye-bye, it became EOG resources. They got rid of that stink from the Enron name.

Chris Powers: EOG was Enron?

George Young: Yes, it was. Teddy essentially ran EOG in its infancy, but Forrest is the one who put it on the map. But they were drilling wells down in the Lobo Tround in South Texas. So, Teddy and I met up at River Crest, and I had just finished playing with the Gangs team. Teddy was coming up there to have a beer and see who was around.

He grew up in Fort Worth and knew Everybody, including non-resident members. And he said, what are you doing? I said, I'm going broke. And he said, well, I thought you were up in Oklahoma. I said, yeah, I drilled two dry holes. I'm out of money. He said, well, and I said, how are you doing, Teddy? And cause they had a tough go and had to sell out Collins, we're at a massive loss to Apache; he's like the ever-ready bunny.

Nothing was keeping him down, and they threw together some more stuff. And next thing you know, they're out of debt, and he's back on top again. And he said, well, what do you want to do? And I said I want to get in this barn at Shale. And he goes, man, I'm hearing about it. Tell me. I mean, we sat there at the.

I remember in the tavern at River Crest, and we talked for an hour and a half. I told him everything I knew. And he said, well, do you know? I said, Teddy, I see every rancher in Parker County, most of Northern Tarrant, and many Wise County people. I said I could put some acreage together.

And he goes, well, hell, let's do it. He said, Hey, what are you doing tonight? And I said nothing now. And he said, come on to the ball game with me. I said, ranger gang, he said, yeah, I said, okay. So we got in the car and drove over there. He explained that he and Kelsey Warren had energy transfer before energy transfer; he and Ray Davis, the majority owner of the Texas Rangers, had what was called heritage propane.

Kelsey, if he ever hears this, he'll text me and tell me I got it all wrong. But Kelsey and Ray Teddy owned a box at Ranger Stadium. So we get to the game, and it's about the third inning. And I said, so how are we going to do this thing? And, I said, well, I don't have any money.

I got to pay my bills. I barely won the gang some earlier in the day; I won 20 bucks today playing golf. But he said, well, I got some money. And so he made me a deal that living infamy was and put up all the money for half of it. And I got half.

Chris Powers: That's awesome on a napkin and a sweet.

George Young: On a napkin and a sweet, which puts the parameters down. I think we papered it up six or eight months later, but he started, he said, get your ass out there and start buying leases where you want to buy. And I said, well, Brogdon thinks it will be good. So that's where we bought it.

We bought some in Wise County, Northern Tarrant, and Eastern Parker.

Chris Powers: And were you going door to door?

George Young: I was just, most of the time, Drill and Info had just come out, and Courthouse Direct had come out. I'd put the kids to bed in the early 90s at Seven after their bath, right?

And we had a, you live in my old house. You know, the backstairs going up from the kitchen. There used to be a door there, and that was my office. You may use it as a pantry or something.

Chris Powers: They turned it into a, no, French turned it into a wine cellar. And then I turned it back into a closet.

George Young: I had a little area about this broad with a printer on the floor. And a desktop computer and a spit cup and that in a chair, because I would get a whole can of Copenhagen and I'd put the kids to bed and I'd work till three, four in the morning running title on the internet and building maps. I taught myself how to use a mapping program that I don't even think still exists so that I could know where I was.

And so I would run titles at night and print out all these tracks that would look cool. There were 2000 acres up off Saginaw Road, and I would, on courthouse direct, see three mineral reservations made in the 40s or the 50s, and the current owner still owned them. I just off that deed only now; granted, I hadn't run it back to patent, but I knew that the current owner might own some of the minerals, but I knew some were severed out.

And I could find them. So the next day or a few days later, I'd go down to the Radek and title plant. I'd run it all the way, or I'd go to the Tarrant County courthouse and run it back to patent, and that figured out, and then I'd start making phone calls, dialling for dollars, you know, and a lot of times I'd You see, I'd be late. I'd call somebody; they go, well, we've already got an offer from so and so.

And I said, well, how much are they offering you? Ten bucks an acre, 50 bucks. The going rate was 100 bucks when I got in it and out. We sold some stuff for 100,000 an acre. So anyway, did all that, Teddy and I formed Collins and Young and luckily, my dear friend, Don Collins, no relation to Teddy.

They're not related. I remember Don was working for Trevor and starting as a contract landman at the office. Trevor also had a great head of land named Bill Kiker. And Don ran into me at the courthouse one day and said, what are you doing? You've bought four or five thousand acres.

You have to be careful, you know we got about that, and he said, what will you all do with it? And we've had a failed opportunity to raise a bunch of money, and then whoever it was went bankrupt. And then, I had a company in Dallas with a significant number on the table, and they refused to honour a few drilling commitments.

And I just said, that wasn't the deal we made now, and I'm honouring my side. You're not celebrating yours. So I killed it. And anyway, we, Don Collins, to his credit, saved my bacon. He said, I need, I'm going to get you an appointment with Bill Kiger and Trevor. It would help if you went to show them what you have got. They're still acquiring leases, and Don's competing with me, but I know Don from playing golf.

He played initially, and we played in a few tournaments. There's honour among thieves, right? I mean, I trusted Don. He charged me a couple of times. We were getting a run around from some landowners, and he called me, go to so and so tell you that, did you offer him a quarter royalty on that track? And I go, hell no.

That son of a bitch told me you offered him a quarter. And I said, no, I never went over 316. So, I got to leave some room for an override. For, you know, got to eat for me, got a man's got to eat. He goes, I knew it. I told Bill Kiker that you wouldn't offer a quarter. You're not that stupid. Anyway, he gave me an introduction.

I get over there. I laid my maps out, put a benign trade before the owner, and made a deal.

Chris Powers: And what was the deal?

George Young: Oh, I think they paid us 300 or 600 an acre, but he needed some time, and we wanted to keep a piece of it. So we tried to keep a quarter. That was Teddy Collins. That's why he has been in the business for so long.

He would be 84 today. He died on almost his 80th birthday. So he's been gone four or five years, but he said some sell all of it. And I said, why not, Teddy? And he said, you never know if you're selling these Texas fields, son; you always want to keep a child's portion. So, we held a child's portion, which was a quarter.

Chris Powers: And how many acres did you have at that point?

George Young: 4, 000.

Chris Powers: And that was up in Northern Tarrant.

George Young: Yeah. Northern Tarrant had a little bit down by Benbrook.

Chris Powers: How many different leases were there?

George Young: It's about 25 or 30.

Chris Powers: Okay. So these are big blocks.

George Young: This is the stuff I found online; I didn't have a crew. I didn't have anybody to help me. I had Stacey answering the phone, dodging creditors and me.

Chris Powers: I am never going to walk into that closet the same again.

George Young: I will walk in and take a left. That's where I stand.

Chris Powers: My office is opposite the house. I'm tempted to unplug that. I will open the computer, take it into the war room, and start working there. Deals have been slow lately.

George Young: Telling you Linda would come to the head of the stairs at two in the morning. Are you ever coming to bed? Honey. I'll be up there when I'm done, but I was up every morning at 7:30 and took those kids to all sites because that was my deal.

That's it. It's fun. And kids didn't see much of me; they never saw me during the day. They didn't see much of me at night. That was my time with them, and I treasure it. And so I took them to reading friends or wherever they were. And then on to carpool George's at Star Point for a while. And then all science and, you know, that was my time.

Anyway, you make a deal with Trevor, 600. And he keeps a quarter.

George Young: Here's the best part. So I bought this one lease. From an Indian, from an Indian liquor distributor in Oklahoma City names, I don't want to say his name better not, and he had bought a lease that had one producing well on it at a, like an EBCO auction, one of those on the earliest online trading platforms.

Why, I don't know. That Indian didn't know the first thing about what he owned, but several companies had drilled right up to his lease line and made excellent vertical Barnett wells. He started getting wind of it because Force Evans was calling him, but Vincent was calling him. Chiefs calling him, Devin's calling him, and I get introduced to him by kind of an old scallywag who's no longer with us in Oklahoma City, and he took me to this bar where this young man was going to be having a drink that night, and I stayed there till closing time drinking.

I was drinking club soda. I was buying that Indian absolute martini and made a deal with Indian. At about two in the morning, on the back of several napkins, I had to wire him 85,000 the following afternoon. That was the deal. If the money wasn't there by four o'clock, our deal was off, and he was going to sell this lease to four sevens, and I beat them by 10,000 or something.

It was called the Donaldson lease, and it was 196 acres. It was in the honey hole, so I called Teddy from the bathroom and men's room at night and went. Teddy woke up, and he went. Everything was okay. It's all gravelly voice. And I go, everything's fine. And he goes, okay. And I said I need 90,000 wired into the account tomorrow by lunchtime.

He goes, okay, night, night and hangs up the phone. He never asked what it was for. That's the kind of partner he was. That's amazing. I didn't even ask, so I stay up all night, I drive to the cater, I pull into the title abstract company, and I look like a dog mess, and this little sweet lady working at the front desk goes, Honey if you've been in a bed yet, and I said no, ma'am, she said, well, let's get you some breakfast.

Cause you're still about an hour early. We don't open for an hour. And so that lady sent me across the street to the diner, and I ate breakfast, coffee up, came back, told her, showed her this map, and said, I've never worked this part of Wise County. I didn't work in Wise County at all. And I said I've got to do a cursory and make sure this fellow owns this.

And that there aren't any lanes on it. Cause I got to buy a lease from this afternoon. I just told that lady it all. She said I got you taken care of. She took my piece of paper and said, you go sit down right over there. Go back around to the diner and get yourself some coffee. And anyway, she came back and said, you look good.

It's still in his name. There was an old lane when he bought it, but it looks like it's getting released. Don't worry about it. I said, yes, ma'am. So I get down there. He drives down from Oklahoma City. We fight over the document. Everything's fine. Teddy's money's there. Get him a cashier's check. When I went to see Trevor, he looked at my map, and I had acreage scattered around the play. Still, he kept looking at that one track, and I didn't realize I did because the Chief owned about 900 acres that adjoined it to the South, and that was their primary original best holding in the Barnett.

So they wanted that bad. And so we made the deal. It was an excellent deal for Trevor, a great deal for us. And to tell you what kind of man Trevor is, he is my dear friend. I look at him, Teddy, John Bromley, and a few men who have significantly impacted my life as mentors. And I wouldn't ever listen to whatever they say and try to do what they say.

But he said, now, George. I have one little problem. I have to wait about 60 days to be able to draw down on my line of credit. And my lawyer will be in Italy for his first vacation in about ten years. So he's your lawyer. And he went and told me his name. I said he was a fraternity brother of mine at the University of Texas.

But Trevor said we have a deal and close in September. It was June, and so I went. I shook his hand, and I said, okay, fair enough. I'm in the car, returning to Fort Worth when I return. They're over in Dallas. You know, he had this tiny little office. It was just as big as this room. It had four people in there when he first started; Trevor did.

Chris Powers: Because he had drilled like a bunch of dry. His story is like twenty dry holes or something.

George Young: His story is so beyond comparison to anything I've ever heard. It's fantastic. And you know what he has done and how he started as a lawyer, Thompson and night, but he, anyway, I called Teddy and I said, we got it.

It's great, how much are we going to get? And I told him, he goes, that's awesome. When are we going to get some paper flying? And I said it's just one little thing as significant out of town. And so he goes, well, do you trust this guy? He didn't know him. I mean, nobody knew him. I said, yeah. I do, and he goes, and I said, plus his lawyer was an essay with me down in Texas, and there was a long silence.

He goes, okay, so that's what he told me. He said, get the deal done. He trusted me. I trusted them. David gets back from vacation. We paper it up to page agreement. Everything we negotiated was what was in that document. There was no retrade. There was no funny business, everything. That's how the oil business should work. You don't need 42 lawyers and 800-page PSAs. And look at the hoops you must jump through to buy real estate. But anyway, that was how it started with Trevor. We're still partners in deals. The old legacy things, but we're still dear friends.

Chris Powers: Did you know that you were buying the honey hole at the time?

Or was it still early when you didn't know you were in the guts?

George Young: I thought I was in the guts but didn't know. I'm not a geologist. I knew Vincent's Threshold had drilled four good wells, offsetting it. I saw the production on those wells and knew they were trying to buy it.

It's like close ology. You know, when I saw the names of the people trying, He would hold his phone up, and it would say four sevens. We're at this bar, and he had it on his cell phone. Well, they're calling again, George; you better jump your offer up a little bit more, and I mean, it was apparent. So, I just found out it took a big gamble.

Chris Powers: So you sell the Trevor. Well, you sell, you keep sell down and key. But that wasn't the sale to Devin. So take me from Starter Kit to the sell to Devon.

George Young: That was the starter kit. And Trevor had me come over about a month after we closed.

And yeah, we got a lot of our money back. Most of it went back to Ted and got us out of debt because I'd borrowed all the money to buy everything from Teddy because I didn't have any. And I made a little coin. Teddy got all his money back plus interest. He carried me for a half-prime plus two.

He's no dummy. And, anyhow, Trevor goes, what are you going to do? And I said, well, when you start drilling our leases, we'll shoot with you. He said, well, what do you want to do? I said I'm going to keep buying leases. So let's buy leases together. And so we made a little deal where I'd get out just me, and I ended up hiring a great young.

Jim Cox is still around, and I saw him at lunch not two weeks ago. And so we started putting acreage together, competing with Trevor, but everything that I, so Trevor's funny story about me was, Oh, George, he goes, he's like a cat, whatever can catch, he can eat. And so I'd be, he had 300 land men by then working the whole barn at, and I'd slip in over here and pick out a, somebody I'd played golf with somewhere that had 500 acres or their family did.

I'd get a deal made, bring it to Trevor's land guys, and they'd go, how'd you get him? We've been calling him for months, and I said, well. I have talent anyway, and then they do it from there. They paper it up, Teddy and I'd have a quarter we'd pay our part of the bonus. That was just the way it worked.

It was brilliant in its simplicity, but I felt like part of the team, and we were partners, and I have a profound affinity for the word partner; it's like your marital partner, your business partners, you know, you don't want to violate that trust, and so we roll along from 02 to 06, and Trevor's company is growing exponentially. We're drilling tons of wells, and horizontal wells showed up in 2003. How are we doing on time?

Chris Powers: We're good, how you go.

George Young: I'm fine. I don't have anything, but we have 2003 and horizontal wells. Devin is bringing in horizontal technology, and horizontal wells have been introduced previously.

Jack Messman and George Lindahl over at UPRC were drilling horizontal wells down in Dilley in the Austin Chalk 10 years earlier. Hell, they were shooting 20, the North Sea in the late 70s and the early 80s horizontal. We were all sitting on our hands thinking, Oh my God, if flat works, this could be big.

So that's when I started doing scouting. So I assembled nearly 130,000 acres with Chief, and 50,000 was in one deal. So, I won't act like I'm some rock star. It was one deal we bought from a small operator. Boy, I bet they were rude the day they sold that because the money we made flipping was just insane, but maybe it's 40,000 on that one deal, but the rest of it was 2000 acres here, 500 acres there.

And the most significant piece that I put together was Alliance Airport. I met Ross Jr. when we both just got out of college, and he was very close to one of my best friends, Mike Berry. So, you know, well. Mike was working at Alliance, and I introduced Ross and Trevor Trevor cause I couldn't believe I'd never met him.

So we go to the same church. I sit behind him in church every once in a while, but they have never really formally been introduced. So, by then, Chief was a big deal. And we made that deal in late 2002, and I can't go into those terms, but there was a sweet deal. Ross made it to where we could afford it, and he got a lovely look back that I doubt anybody's ever gotten since.

Chris Powers: What's a look back?

George Young: You drill the well after some particular period, you get a look back, and you decide, I think I'll take 50 per cent of that, 25 per cent of that or. 10 per cent of that, we call those look backs. You get a free look. So, like the following real estate deal you bring me.

I want to look back. And if I don't like it, I can give it back. Well, I make a call. But we had that going God; we drilled some good wells up at Alliance. But the Devin thing is that Trevor didn't want to sell, but then he decided to sell.

We're going to sell with him. Ross didn't want to sell, and he owned a big chunk of the 16,000 acres we had up there at Alliance, and we said, okay, so we carved that out. Chief kept that and kept operating. I was officing up there. On the runway, many people go; where have you been for the last couple of years?

I said I was officiating on the runway at Alliance airport, and my best buddy, Mike Barry, was over in the big fancy office building that Hillwood has this way. And I'm in a double-wide area with roughnecks and oil field trash like me, and I bought it right away and tried to keep the real estate guys.

From killing the oil field guys and vice versa because we had to operate on arguably the most successful real estate venture of all time, maybe in at least our part of the world, and, you know, I'd get 3 feet right away for a 4-foot pipe tease Mike about that. Wasn't that bad? Russell Laughlin and all those guys were fabulous to work with, but it was trying and stressful.

And anyway, when Ross started not to sell, I thought that wasn't good at first because I thought, Oh man, we had an eighth interest in what Collins and Young did. And the rest of it sold for 2. 6 billion, and we had a child's portion.

Chris Powers: And the kid's menu could be better.

George Young: I'm telling you, the kids menu is fantastic, especially at Denny's; you can see what you'll get, but we did just fine.

And then, lo and behold, 2009 rolled around, and Ross was ready to sell and Ross. People underestimate how wise that man is. He is brilliant, and not only was he in the Air Force and a pilot, but he also flew a helicopter around the world. I met him at an oil and gas symposium for idiots in Denver.

And everywhere we went, we buddied up together, went out and had a drink. After class, people would see him on the street and go; you're Ross pro junior. I got to tell you something about your dad. I felt so sorry for him. He couldn't relax, you know, and this one man cornered him in a bar. I finally just went over and told the guy we were leaving and that he needed to stop.

Ross was ever the gentleman. And so when he was ready to sell, we put that on the market, quicksilver bond; it was a billion two, but Ross had bought all the minerals under most of that surface while he was assembling the land for Alliance Airport, and Mike Berry bought most of it, and nobody would I ever dream there would ever be an oil and gas play there, but Ross, probably some portion of his brain said, well if there's ever any oil and gas there, I don't want to pass up the opportunity. Still, his real thinking was, I want to be able to control my destiny.

You buy a hundred-acre tract. You want to build houses on it. You don't own the minerals, and you don't have a waiver, and you don't have surface protection. You could get in big trouble. So you always make, you know, better now, you know, you want to ensure that the minerals are severed from the surface and nobody can come in.

The rights of ingress and egress have been severed. So Ross sold those minerals and that deal, which got him a lot of money. And we got a lot of money. And unfortunately, it didn't work out well for Quicksilver. They're good friends. It broke my heart, but Hey, that's the way it goes. That's the business.

Gas was at 1230 the day we signed the contract. It was at eight the day we closed, and it was at two, six months later. So we top-ticked that one.

Chris Powers: And you didn't know you were top ticked.

George Young: Hell no. I thought we were selling too cheap.

Chris Powers: Did you ever run into Aubrey through all this?

George Young: Oh yeah. Aubrey, I ran into him at Trevor's office one time. He was coming in trying to meet with Trevor, and I was in the lobby with him. And he's an imposing character. He's a big guy. And he was 6'3 or four, and I'm 5'11, And he shakes your hand. You know, he was more significant in life, and he had just gotten into the Barnett, was paying too much, was killing us out trying to lease.

We're all going, hell if, since we can't lease anymore, let's hope he'll pay more money when we sell to him. But we never sold any of it to Jesse. We sold it to Devin and Quicksilver. That made me think that there's no question about it. And I don't know what I'd be doing had the Teddy Collins, Larry Brogdon, Trevor East Jones, and me breaking my pickup shooting a 3D in Garvin County.

Had all that not happened, God had not put me in all those places, I don't know what I'd be doing. I know one thing. I'd be coaching football. I might. I loved it. I loved it. I did. I love being around young men and being there to help guide them and teach them. You know, it was fun.

But I'm what I'd be doing if I had never made that kind of generational money. But at the end of the day, we sell had a low.

Chris Powers: What happened on closing day? Did you believe that was going to happen?

George Young: I remember getting the fed funds wiring email that showed that the wires had been sent, and then I had the bank; I was banking at Texas Capitol Bank. They had extended to Teddy and me one of the best lines of credit I've ever had in my career. And it was non-recourse to the properties because the wells were so good. They didn't need personal guarantees. They knew we'd pay them, but the Teddy Collins balance sheet wasn't so shiny, but it was.

I remember the bank called and said Chris Cowan called me and said the Eagle had landed. We had two closes. We ended up making some more deals. We backed Teddy's boy, Patrick, who is a huge success story in his own right. Patrick, I brought him in. I mentored him when we were at Alliance, and then I put him out on running a land crew in another area, buying leases.

That was a terrible mishap. We lost our ass on that, but the second party did a good job and met a couple of other great landmen down there. They're all in the business, and then NCAP started calling on me and got a Murphy Markham, and he kept coming in and saying, you need to do a private equity deal. And I go, the hell's that?

Well, that's private equity. And I'm 44 by then or 46, and I'd use my or the bank's or investor's money. And he said that's like an investor. And I said, well, what kind of terms? He started walking me through it. And I go, so let me get this right. You all get all your money back plus an 8 per cent profit, and you keep about 80, and I get about 20.

It could sound better. It needs to be the other way. You all get 20. I get 80. Well, he called on me for six years, five years. From the first sale with Devin, he came by twice a year. From Dallas, and he was a, you know, manager, VP over there and finally wore me down in 2013. I was getting bored, and we were offing together. Then, we were right across the hall.

Chris Powers: I remember I had that big table made out of that vast map up in North America. North, up in, was that the Balkan, you had that enormous map. You were selling the hell out of that thing.

George Young: And I lost my ass on that deal too. I've made a lot of mistakes, Everybody. And nobody, anybody that takes Donald Trump, see ever made a bad deal in his mind, but you know, he has, I've made some terrible deals, but I had another mentor after I hit that first big lick is a lot of money. And he took me to lunch with his son and CIO; this guy had a big family office and still does. And he said, George, you've just had a significant liquidity event. That's the first time I ever heard that word. And I started going, Ooh, I had a liquidity event. Ooh, I'm liquid. That sounds better than saying I hit a lake.

So he said the first thing I want you to do is to take some of that money. 10 or 20 per cent, put that over in another pile, and call that your stay-rich money. And I said, what? He said it would be your stay-rich money because life has many twists and turns, and you never know what will happen.

So I did, and I still have some of that original money invested in things that have changed over time, but I held to that. I dipped into it several times when I needed it, but I'm trying to put it back, so it was great advice. So, it ends up. Murphy finally gets me, okay, what? But here you have to explain this to me, and I have yet to do it for 20%, so we worked out a better deal and are in Cap.

I didn't know them from Adam. I needed to understand private equity. I started learning and all I could, and that's all you can do. You know, I mean, I didn't quite get it, but I went over to their Dallas office, met David Miller, who I like, six foot nine, former SMU basketball star, who was the founder of NCAP along with Bob Zurich, Gary Peterson, and Marty Phillips.

David ran the Dallas office, and they ran the Houston office. And I had these great young men, Crane and Mark Welsh, who became my team, and they said, George, we want you to put an exploration team together and go out and work the Permian. And I said, all right. And horizontal play was on big out there in 2013, 14.

Horizontal wells were taken off, but most of the Permian Basin was still dominated by vertical wells in the Midland Basin. And what Teddy used to refer to tongue in cheek. So, anybody listen to this, tongue in cheek, I do not mean this; the spray berry play was the largest non-commercial oil field in the world. Everybody said that because Jim Henry, John Cox, and Autry Stevens were the big movers drilling the spray berry wells.

And they were, they could drill those wells for 70 000 back in the sixties and the seventies, and those people could buy leases for ten an acre and an eighth royalty, and come in at a hundred barrels a day and be 10 barrels a day a year later, and they'd make that forever. So, how much oil would you produce if you had a thousand of them?

Ten thousand barrels a day forever. And it made John Cox a multi-billionaire. It's the same thing with Jim Henry and Autry. He just sold his company for 26 billion, or it's under contract, and it all started with one spray berry well. So anyway, I made one phone call to an old friend named Steve LePerry, who was an operations and drilling manager for EOG in the Fort Worth office when they were drilling their Barnett stuff.

And he already had arguably the best landman I've ever worked with. And David Fry, an EOG landman in Fort Worth, was transferred to run their entire tyre Eagle fruit position. This guy's a rock star. They had a great CFO, Chris Willi Ford, and Steve already had an eye on John Conaway, who he said was a savant for a geologist.

Let's meet at NAPE. It was almost NAPE time, and we all broke bread. So I did, man; this could work. I'm going to commute three days a week down there. And so we started silverback expiration. We bought a deal when oil collapsed in 2014—another God thing. Oil was at 110 a barrel.

By the time we signed the deal, it was 60 and went to 20 or 22 and later, but it was better than COVID when it went to negative 38. We stole that property, put a couple hundred million bucks in it, and turned it into about a billion.

Chris Powers: And how long, and, okay, we, I think we still were officing together for those first couple of years, weren't you like the only guy left in the bedroom, and you were thinking, am I the crazy guy here buying this?

George Young: Because John Conaway is the most intelligent man I've ever met.

Chris Powers: Who's that?

George Young: My geologist. Smartest guy ever. I'm not kidding you. He can do anything. He can run all this equipment. He's a guitar player. He built his own house in Maine. I mean, this guy's unbelievable. It's a cordon bleu chef. I mean, this guy is just amazing. But anyhow, he would go back and look at the seismic.

They had a data room. And geologists noticed nobody had signed in since September. And this is like late October. So, he comes to one of our weekly Monday meetings. He goes, man, ain't nobody looking at this thing. Everybody's left the building because prices have dropped, and all their management has gone.

No way you're not; we won't give you any money. So, we went back with a shallow offer. That wasn't very comfortable, but I did it. The banker working for an unnamed investment banking house challenged me and insulted my manhood and knowledge of the oil business.

I went off on him, and he was fired that day. I told the seller, I said, either he goes, I think I'm your last one standing. And he goes, or I'm out, and he was gone that day, but he's a good guy. And if he hears this, I won't say his name. He knows who he is. We've seen each other since he just had a bad day.

And he tried the age-old technique, so you don't think oil prices will be back to a hundred dollars a barrel by this time next year. It was one of those kind of things. And I had to remind him that I managed a water flood in Hockley County, Texas, where my realized price for sour oil was 7 dollars a barrel in 1984.

And my lifting cost was 14 dollars a barrel. Even my dumb ass knows that math doesn't work. You're spending 14; you're getting seven, which means losing seven on every barrel. But so anyway, we get it. It was a big international company. They had done a Cadillac job laying out infrastructure, water lines, water pits, water wells, and saltwater disposal wells.

It had everything. And so we started drilling. And we let some of the acreage we didn't like expire. We kept adding to it and got a reasonable price for it. We needed a better price, but we got an affordable price. The best thing we did was partner up with a midstream company called Eagle Claw, which bought the midstream facilities from the company that we purchased.

And turned it into a behemoth, sold it for 2. 2 billion to somebody, Morgan Stanley or somebody up there, and we own 20 per cent of it. So that was how we got to supersize our number and get in capital for bagger. So it was pretty sweet.

Chris Powers: Eagle Claw is the most oil and gas name ever. So that is Engel Claw.

George Young: Those assets are probably worth a third of that today. But I don't know.

Chris Powers: You might repurchase it.

George Young: I won't; I don't think I'm a midstream guy. I'm a mineral guy now. So let's talk about it.

Chris Powers: Let's set the stage. It is the final big story, but it's a big one.

George Young: This is how it works in minerals, and your friends and mine, Trent and Tyler, are calling on me for the last year of the Silverback sales, and we closed on December 27th and December 27th of 2016. And I'm back at the office on January 3rd January 3rd, looking for deals. My other partners, Steve, David, Chris, and John, remain there.

They did all the heavy lifting. I didn't. I was there three days a week, but those guys worked harder than me. They had to, they knew what those people were doing and, you know, that wasn't my gig, but I did my part, got things done that I needed to get done, but they took some well-deserved time off while I was ready to get back at it. So Trent and Tyler have been bugging me because they knew you.

Chris Powers: And you called me. Do you remember? You did a reference check.

George Young: I said, who are these guys? I remember that. I said they seemed savvy, but I knew they could golf anywhere. But I said they kept coming to me with mineral ideas while we had Silverback.

I couldn't get in Cap to buy minerals and save my life. I wanted to, but they wouldn't let me buy them, and I had money to go minerals; they wouldn't let me well anyway, so they came in free. We started buying minerals two days later, and I picked up the phone and called Trevor and said, Hey, let's buy some minerals.

So we did and spent two years' worth of money in about six months. Those guys are some mineral buy-in guys; I'll tell you what.

Chris Powers: Why do you think they're so good?

George Young: Cause they're just damn good. You know, you've played; how many times have you lost a trend on the golf course or Tyler? Never occasionally beat them.

You've never beat a man. And you'll still go to the caddy farm every once in a while. I mean, he's intense, but he's got a personality. They both do, and they've got to work at it. And they play off each other together because you got the young Labrador.

That's Trump's office with him for a long time. I'd call him the young Labrador because he'd chew and pull on the leash. And then Tyler was the calm one. You know, they were perfect for each other. And I love them like sons. You see, they're just. I had to bear my besties, knowing I could trust him.

So we went to play golf one day at Shady and started putting the ideas together. And I wanted to put a lot of money together, but I had to be careful because, you know, I was 50-something, 56, and I didn't want to risk everything on something I didn't know might work, but so Trevor said, yeah, I'll play.

Let's do it. So we split it up. We spent six months, and suddenly, I looked at Will Rogers, who, you know, is my president. His claim to fame was when he called on me ten times for a job; I didn't know if I needed him. I didn't know what to do with him. He's a great guy. His dad and mother are dear friends, but he said, you need to hire me.

And I said, why? He said cause I'm going to make you a billion dollars. And I said, now that's why I've never had anybody say that, and it hasn't happened yet, but you know what, we're chipping away at it. Let's go, and he, he was relentless, and he's loyal as they come. So I told Will, let's see if Leon wants to go.

Let's get some more dry powder. See if the Leon's want to keep doing what they're doing. And I made a deal that so many people in the industry have scoffed at me for doing it because I gave them the most generous deal they've ever gotten. Probably the best deal ever. And it's made me so much money and made them so much money, and people look at me and go, well, do you ever regret that?

And I go, if I knew you well enough, I'd show you why I don't regret it because these guys are that good. And so, anyway, we'll start throwing a corporate model together. We devised some metrics about the basin, healthy activity, and the percentages of one acre drilled in some periods. I got analytical and decided that we would pitch to NCAP out of courtesy because I've just made them a billion dollars, made me a lot of money, and they are my partners.

And it's out of respect and all that. I said, let's show NCAP first what we want to do. We wanted 300 million, and we had them come over. So we got a mineral deal, okay? So their whole Dallas office comes except for David Miller. And I get about 20 minutes into the presentation in the big conference room, cross hall from your office.

And. I go, we're in, I said, excuse me. And those people said we're in. Well, what I said about 5 minutes earlier was that we want you all to see this. It's something other than what you want to do. I know you currently have three mineral companies in the Permian: Santa Ana and Fortis. And I said, you're probably not a candidate for this, but I owe it to you, and I love you.

You have all been good to me, and I trust you. I will probably go to direct institutions and family offices. And 1 of the principals over there goes, what? That's our job. Don't you be going to them? And 5 minutes later, they said, we'll do the deal, and I loved it.

Chris Powers: And so, how big was that first commitment?

George Young: 300 million dollars. A lot of money. That's what they gave us for Silverback, too. So that's a sweet spot for them, for a new team. But the difference between Teddy and I was that we had enough money to put a lot of money in it with them. And those are called B shares. And so what any good private equity provider wants to look for is brilliant.

CEO or founder or whatever. And one with a good widget, obviously, but savvy, good widget, and willing to put his treasure at risk along with theirs. And I always was, and I had enough to do it. So that's how you supersize how much money you make in private equity. The more you can put up, cause your management shares that come after pay-out and after hurdles are reached and you know, you get one and a quarter to one, two to one, two and a half to one, three to one, and your piece, your back end gets bigger.

When you own those B shares, there's no promotion on them, and it's pair pursue with your provider. And so that was impressive for them, and I was willing to do that. And so it was Teddy. And so we did peg one. I'll always remember. I went to Houston, and they asked how fast I would spend this 300 million.

They didn't know me. None of them had met me. And I said I'll spend it in the first 12 months. That caused a big uproar. It was alright. How dare I think I can pay 300 million in a year? I spent 13 months. Trenton Tyler brought us 4 billion worth of deals in that first year. We spent 300 million.

That's how good they are. And we've probably, so then we do, I will only go into some of the deals. We do Pegasus, too. I told Trent and Tyler they were getting frustrated because we had some deals we should have bought that got turned down. Our metrics and our underwriting are conservative.

It just is. And I'm using someone else's money, and if it's my money, I can do whatever I want with it, but I'm spending someone else's money, and I've got to account for it. And I can't go crazy and pay twice what something's worth and expect to make any money for my team.

You know, so there were times I'd be so mad, but Trent and Tyler were getting a little frustrated. So, they decided to go out independently for a while and get their private equity money. And I hugged their necks and wished them well. And I said, let me look over your documents.

Now we're good. And those people made a good deal, and the timing wasn't good, and it wasn't really what they thought it would be. And I said that's your problem with these big private equity shops. There's usually some turnover and, you know, go to NCAP. I know them. They treat me well, you know, always have.

So then I hired somebody else. Good guy. His partner, and it was terrible timing, was Covid. Nobody was doing shit. And so Trent and Tyler came over one day and said, well, let's get the gang back together. And it was; their call wasn't me. I wanted them.

I didn't get their business, so we got the gang back together, and we did Pegasus to deploy about 270,000, 000 then pulled, put the pen on it and drew the pen on it. And that was only a month ago. And then, in the last 30 days. We've gotten a verbal 300 million on Pegasus three, and they're still raising the fund 12 for that one.

So, to date, they have given me about a billion dollars in Pegasus, not including the 300 million dollars they gave us for a silverback.

Chris Powers: And Pegasus today's doing about half a billion dollars a year in free cash flow. What are you going to do with it?

George Young: We're distributing it. It's a funny story. You know, because we invest.

Chris Powers: that's what Everybody wants to know; what do you do?

George Young: Everybody in my management team, whatever money they had and bought those B shares, we're all getting paid every month, just like the LPs. En Cap for the last ten years, will have me come to their investor meetings. I've gotten to know many of these investors over the year, and I shoot them straight. George, how's it going?

I said, Man, it's harsh out there buying minerals, but this last year, or it's great, whatever it is. And I, you know, what you see is what you get with me. I don't call it. As I say, sometimes I step in and have to manoeuvre backwards. But this last one made me feel good because I would love to sell it for a lot of money, ring the bell, and do it again.

I'm not retiring ever. I will keep going until my next stop is over there on the side of the university. I'm going to keep working. I love it too much. Many great young men work for me, like my son. Where else could I get to work with my son?

And Will Rogers, Len Frank, Will Taylor, and Scott Hargrove, my young land, man, you've probably played in some tournaments with him. I mean, he's scratch, and he's a damn good land, man. And I got 52 people, and they all look at me. So one of my, I'll leave and end it this way.

Would we sell? Yes. The price I want and the price Cap wants are more than that. You have to remember that the minerals market is based on what the public trades for, and they're low, but this diamond bag thing, Viper stock, which is VNOM, is up 20 per cent was up 20 per cent today or 5 cents or something.

It's back to 36. It was in the high twenties before Christmas, and its yield is jumping up around nine and a half per cent. When we got in the business in 2017, our thought process was, let's buy these minerals and try to buy them to where our realized price is like 5% because, you know, you buy something that's not producing, and once it's making, cash flow jumps up, your IRR jumps up, and then we'll sell on a ten multiple.

It's like your cap rate in real estate. Do you want to buy it at 6% and sell it at 2%? Hell yeah, you do. It took me a while to figure that out. Yeah, but six is bigger; wouldn't that be better?

Chris Powers: I know, it took me forever. I was in the industry for three years.

George Young: I'm so stupid. And I told you I could have improved at math but learned quickly. I want to sell it at ten caps, which is ten times, you know, distributable cash flow. In 2017, Kimball and Kimball were just in their infancy, but most of the public's Dorchester and Viper sold at about ten times their distributable revenue.

Well, we're almost there, and it's interesting. At least Viper's getting there. There are a few other publics that are not doing so well. And I listen to EnCap. Hey, those guys are all finance guys. I'm an old-school oil man, but they have many more intelligent people than me, and they're my partners. And they say, let's hold tight. Let's see how things go. And allow's distribute this money right now.

It's suitable for all of us. It's great for those people investors. So I'm down at this investor meeting, and guys are walking, women are walking up to me, and they say, Everybody looks at your name tag like a neighbour, and you go to the big real estate deal in Vegas. And Everybody, Oh, Chris powers. Hey, how are you doing?

Everybody looks at your name; they go Young Pegasus in cap minerals. Oh, man. We love getting you all checks; they love getting those checks. I like getting them, too. And, so, you know, it's. It's a remarkable turn of events for a guy who flunked out of UT, didn't want to go to school, and got thrown into the; I had a year and a half to reset coaching football and doing something I loved. I had an opportunity because I was born into an oil and gas family to go to work.

And learn the business. Those things helped make me what I am: a good woman behind me, great kids, and an incredible team over at Pegasus. I'll put my team up against anybody.

Chris Powers: This was awesome.

George Young: I appreciate it.

Chris Powers: George, you're the man.

George Young: Thank you, my friend.

Chris Powers: Thanks for doing it.

George Young: All the best to you and your family.