Here’s some Texas oil industry news that also has some political implications.
The most well-known political donor in Texas GOP politics, Midland’s Tim Dunn, just became substantially wealthier as his shale company CrownRock LP was purchased by Houston’s Occidental for a deal worth roughly $12 billion.
That total is broken down into three tranches: $9.1 billion in new debt financed through loans with Bank of America, $1.7 billion in new-issued stock, and $1.2 billion in assumed CrownRock debt. The deal will go through by the end of 2024’s first quarter.
“We believe the acquisition of CrownRock’s assets adds to the strongest and most differentiated portfolio that Occidental has ever had,” Vicki Hollub, CEO of Occidental, said in a release.
“We found CrownRock to be a strategic fit, giving us the opportunity to build scale in the Midland Basin and positioning us to drive value creation for our shareholders with immediate free cash flow accretion.”
The deal is a massive one in the petrochemical business, moving CrownRock’s 170,000 barrels-per-day production to the 10th-largest petroleum company in the U.S.
Not so long ago, some pundits were predicting that Saudi Arabia could just lower the cost of oil until they drove all the American shale players out of business. That turned out not to be the case. American shale companies improved their technology and got smarter and leaner, managing to survive and thrive even at lower oil prices.
The purchase may also have a significant impact on the Texas political landscape.
But the larger impact could come on the political side, supplementing Dunn’s already large war chest even further. Dunn has contributed nearly $14 million to candidates and political action committees (PAC) on the state level in the last three years, $9.6 million of which went to the now-embattled conservative group Defend Texas Liberty (DTL).
DTL has been mired in scandal since its then-president, former state Rep. Jonathan Stickland (R-Bedford), hosted right-wing gadfly and antisemitic commentator Nick Fuentes at the office of his Fort Worth consulting firm Pale Horse Strategies back in October. Fuentes was photographed entering the office building and leaving it over six hours later. The meeting has sent a ripple effect throughout Texas politics, most notably in Lt. Gov. Dan Patrick’s use of his $3 million donation and loan from DTL to purchase Israeli government bonds.
I never reported on the whole Nick Fuentes thing because I thought it was a clown-show distraction from real news, and because I never felt Defend Texas Liberty had much of an impact. They back Dan Patrick and Tony Tinderholt, but both were well-established before they got DTL money.
Stickland was removed from his position as president — replaced by Luke Macias — but could still preside over Pale Horse according to business filings, the overarching consulting firm that directs the various organizations underneath its umbrella.
It’s also caused turmoil within the Republican Party of Texas (RPT) — to which Dunn has given $130,000 since 2021 — culminating in a heated debate over the adoption of language forbidding association with espousers or tolerators of antisemitic views.
The scandal drew a tacit response from Dunn when he posted back in October, “I am proud to have been named as a top 50 Christian ally of Israel by the Israel Allies Foundation, and call on all people to stand with Israel at this time of need. Israel must defeat Hamas, who was put on a suicide mission against them by Iran.”
Dunn is the chairman of the Christian Advisory Board within the Israel Allies Foundation — a group that organizes trips to the Jewish state for political leaders and business figures with the goal of fostering partnerships.
If Dunn needs a good cause for his billions, maybe he could consider backing primary challenges to every Republican state rep who opposed school choice. The filing deadline for 2024 races expired just as I was typing this up…
Tags: CrownRock, Dan Patrick, Defend Texas Liberty, Jonathan Stickland, Luke Macias, Occidental Petroleum, oil industry, Tim Dunn, Tony Tinderholt