To hear Will Hickey tell it, playing poker and running an oil company don’t sound all that different. Sitting in an eleventh-floor conference room in one of the few high-rise office buildings in downtown Midland, he’s in need of a shave and a haircut and could pass for a college senior on a six-year plan. Except it’s been fourteen years since his school days—when he played a lot of Texas Hold ’Em, mostly online. He would grind away at as many as four games at once. “I had a lot of success for a long time,” he says. “It paid for my lifestyle while I was a student.”
While still a dough-faced 21-year-old undergraduate, Hickey competed in his first in-person tournament, at the WinStar World Casino, in Thackerville, Oklahoma, just north of the Red River on Interstate 35. In a noisy hall filled with more than one hundred tables, he held his own in hand after hand of poker against mostly middle-aged men, many of them professional cardplayers. The eventual winner, Jim Carroll of Frisco, then 54 years old, recalled ribbing Hickey, “Just an old guy talking smack. He didn’t return fire.”
Hickey advanced to the final hours of the tournament’s last day, placing fourteenth out of 1,450 fierce competitors and turning a $2,100 entry fee into a $39,000 purse. One could reasonably glean from this story that Hickey performs well under pressure, even when he is the youngest person in a room. But what does poker have to do with his job today, as a top executive at Permian Resources, a Midland-based oil company traded on the New York Stock Exchange and valued at north of $6 billion? In both, Hickey says, “You’ve got millions of data points all around you, and it’s just who can synthesize that information the quickest and get to the best risk-adjusted decision the most often.”
Hearing this analogy, James Walter pipes up from his seat next to Hickey. He’s protective of his childhood friend and even more protective of the company they’ve built together, as cofounders and co-CEOS. Walter’s hair is immaculately combed, like that of a life-size Ken doll, and he wears a dress shirt and pleated gray slacks. “It’s not like a gambler; it’s more of a math exercise. It’s like he has an edge that if prosecuted correctly has a positive expected value,” he says. “Not gambling.”
The pair have had each other’s backs for years. They grew up on the same street in University Park, a wealthy enclave in the center of Dallas. Hickey was always quarterback when the neighborhood boys gathered, usually on the lawn of the Hickey house, for tackle football. Walter’s job was to protect him from the rush.
Today they make the big decisions together at Permian Resources, though Hickey, age 36, primarily handles operational and engineering matters, while Walter, a year younger, manages the company’s finances and business development. If they worked in the tech industry, no one would bat an eye at their ages—they might not even be considered young. But most CEOs of Texas-based oil companies are in their sixth decade or beyond. Even more notable is the youthfulness of the two hundred employees Hickey and Walter have assembled. “I’m probably one of the more seasoned people here,” said Matt Garrison, the company’s COO, “at the ripe old age of forty-one.”
The emergence of an oil company staffed by millennial and Gen Z workers is all the more remarkable because many of their peers have turned away from careers in fossil fuels. At Texas A&M University, in College Station, the number of Aggies majoring in petroleum engineering last fall was 418—down from 755 four years earlier, despite higher oil prices, which have historically attracted more students. A few years ago, when today’s college students were teenagers, global consulting firm EY surveyed them about careers in oil and gas. Nearly two out of three said the industry was unappealing, with more than one in three describing it as very unappealing. A recent Pew Research Center survey found that concern about climate change was significantly greater among younger Americans and that this worry has shaped their thinking about energy. Roughly 42 percent of millennials believed the U.S. should phase out its use of fossil fuels, compared with 25 percent among baby boomers and those older.
But in the offices of Permian Resources, on the top three floors of the Reliance Building, the young workers gather over their daily free lunches without worrying about the judgments of their peers. “I like being in a place where you don’t have to apologize for what you do,” Garrison said, while eating a bowl of rice, beans, and chicken fajitas from Chipotle. “It lets you concentrate on your job.”
Even as global demand for Permian Basin oil is more robust than ever, the industry is graying. Most U.S. members of the Society of Petroleum Engineers are within sight of retirement. Replacing them and retaining other white-collar workers will constitute a monumental task.
A recent survey by the World Petroleum Council found that 57 percent of students and young professionals in oil and gas production worry that the transition to greener energy is making their work obsolete, and they don’t plan on long-term careers in the industry. Last year the University of Houston surveyed its students and found they were twice as likely to want to work for a renewable-energy company as for an oil company offering a higher salary. If the U.S. oil industry is to remain vital, it could use a youth movement like the one at Permian Resources.
Out of curiosity, on two occasions I walked from the top to the bottom of Permian Resources’ multistory parking garage. I saw a lot of luxury pickup trucks and sport utility vehicles but not a single EV or hybrid. Nor did I see any chargers for electric cars. “Oil and gas isn’t going away anytime soon,” Walter said when I asked the co-CEOs about it later. Not that they’re opposed to their workers driving cars that don’t require gasoline. “Electric vehicles are going to be an important part of the future,” Hickey said. “We all need to accept that, get on board with it.”
Neither of them hails from an oil and gas family, though Hickey spent parts of his teenage summers with an uncle who owned stripper wells near Breckenridge, about sixty miles northeast of Abilene. Both Walter and Hickey attended the University of Texas at Austin, but only Hickey earned a degree in petroleum engineering. Walter studied finance, though he did fall under the sway of a professor, former Navy admiral Bobby Inman, who convinced him of the geopolitical importance of oil.
After college Hickey went to work for Irving-based Pioneer Natural Resources and then the Dallas office of EnCap Investments, a Houston-based private-equity company that provided funding for oil and gas companies. Walter was in Houston, working at Denham Capital, where his job involved financing energy projects in West Texas. They stayed in touch and, in 2015, Walter concocted a reason to visit EnCap in Dallas. He popped his head into Hickey’s office, and soon they were talking about starting their own company. They got so excited that Hickey worried his coworkers would overhear him. “You told me to keep my voice down,” Walter says to his friend as they recount the story. Over the next few weeks, they developed their business plan, which began with a simple first step. “Move out to Midland and really kind of figure out what to do,” Hickey says.
Billy Quinn, the then 45-year-old founder and managing partner of Pearl Energy Investments, was their first backer, initially providing $75 million. (Nearly $200 million came later from Quinn and others.) “We love their energy. We love their ambition. We love their intellectual honesty,” he told me. It didn’t hurt, he added, that “they were surprisingly mature.”
Walter and Hickey were 27 and 28 years old, respectively, when they decided to take the leap. They were both married, and Hickey had kids. Walter said moving to West Texas just made sense: “Midland is the center of the universe for the Permian. It was a pretty easy business decision.” Persuading his wife was tougher, but she preferred Midland to other oil hubs—Farmington, New Mexico, or Anchorage—because it was closer to friends and family. So far, recruiting workers to Midland hasn’t been an obstacle for Permian Resources, but recent history suggests it might be. In 2014, for example, Parsley Energy relocated from Midland to Austin in part to help attract a younger staff.
Hickey and Walter named their company Colgate Energy, after the street they grew up on. They specialized in a less-developed portion of the Permian called the Delaware Basin. Its roughly 12,500 square miles straddle the Texas–New Mexico border. Colgate aimed to be scrappy, keeping costs low while looking for opportunities to acquire drillable acres. This helped it survive several years of middling oil prices, as well as the market collapse at the outset of the COVID-19 pandemic. The company grew steadily and, last year, it combined with Denver-based Centennial Resource Development, a publicly traded firm.
When Hickey and Walter agreed to the merger, they made clear one nonnegotiable condition—that they must remain co-CEOs of the newly dubbed Permian Resources. Investors were initially unsure about their youth and the unusual shared-leadership arrangement, said Scott Hanold, the managing director of energy research at RBC Capital Markets. But the pair largely put those concerns to rest in the final three months of 2022. The company outperformed many of its competitors, who blamed bad weather and inflation for poor financial results. Not Permian Resources. “They crushed it in the fourth quarter and raised the bar,” Hanold said.
What could account for this success? How does a youthful oil company operate differently? Hickey points to a willingness to use data aggressively. For instance, before drilling in a location, Permian Resources will look at all of the adjacent leases to scrutinize the designs of the wells and the performance of each. Then it selects the most-successful components of the neighboring operations and uses that information to plan its own wells. “Our school of thought is let’s go mine every piece of data we can find,” Hickey says. “Then let’s do that again next quarter and next quarter and next quarter.” It’s not that other oil companies don’t use data, but Hickey says there’s a higher level of comfort among members of his generation in letting data drive every decision.
Walter had a slightly different answer: youthfulness makes their oil firm hungrier, more restless. While many companies will consider acquiring drillable acreage only in large blocks, Permian Resources will cobble together smaller opportunities. In the first three months of the year, it closed more than 45 deals, an astonishing flurry of transactions and leases. “We’re willing to do the hard work,” Walter says. “I think it’s not that we take more risks. I think we’re just more willing to do things that other people didn’t want to do.”
Not long after Permian Resources announced a $192.3 million profit for this year’s first quarter, about 125 employees gathered for an hour-long all-hands meeting. Just a couple of them looked like they might remember life before everyone carried cellphones. There wasn’t a tie or a dress in sight. The only apparent gray hair belonged to the 37-year-old general counsel, whose rolled-up shirtsleeves and lanky athletic build recalled Beto O’Rourke on the campaign trail.
Outside this room, the world is changing. Some states and local governments want to gradually eliminate gasoline-powered automobiles and natural gas stoves. But inside this meeting, Permian Resources workers share an eagerness to drill for crude at a time when the aging workforce elsewhere is eyeing the exits.
And why shouldn’t they? The Permian Basin is producing 5.8 million barrels a day, up from 1.3 million barrels a decade ago. Thirty-two-year-old Michael McNamara, a petroleum engineer who works on corporate strategy at Permian Resources, characterizes their work as a noble pursuit. “If you want to throw darts at us, that’s fine,” he said. “But those darts are made out of plastic and steel, and you don’t get that without oil and gas.”
Halfway through the meeting, Walter takes a beat to thank everyone. “Our goal and expectation,” he says, “is we build something we look back on and say, ‘Wow, that is really special. I was really blessed to be part of that.’ ”
The co-CEOs click their way through a slide deck crammed with operational details. They warn the employees that much of it is confidential information that shouldn’t be shared outside this room. Such financial transparency with the entire staff is unusual for an oil company, but the use of PowerPoint? Well, some habits in corporate America, it seems, resist change.
Hickey and Walter invite questions after they wrap up their presentation. Some are probing, others irreverent. Permian Resources had recently purchased the building housing its offices, and there had been talk of remodeling the place and adding a gym. One employee asked, “Can we build a private slide to the garage so I can get home sooner?” Laughter ensued. Soon the meeting finished, and Hickey and Walter stuck around to break open bottles of Miller Lite and Shiner with their employees, in celebration of another successful financial quarter. They hope for many more opportunities to toast their collective success—a success that is unapologetically driven by fossil fuels.
Their vision of a sustainable future doesn’t involve a transition by Permian Resources into building solar farms. That’s not what their investors want. Hickey and Walter are mindful of lessening their environmental impact by reducing flaring and trying to eliminate spills, but they are still going to pump oil. The sustainability that most interests them is building a long-lasting business. Fossil fuels, Walter says, are “something that is going to be here for a long time.” Maybe long enough for a thirtysomething to enjoy a decades-long career before a comfortable retirement.
This article originally appeared in the August 2023 issue of Texas Monthly with the headline “Drill, Millennials, Drill.” Subscribe today.
Opening illustration credits: Walter, Hickey, and Building: Arturo Olmos; Rigs and money: Getty
