HOUSTON ? George P. Mitchell, the Texas billionaire who pioneered shale-drilling techniques that triggered a renaissance in North American oil and natural gas production, has died. He was 94.
He died Friday at his residence in the Tremont Hotel in Galveston, according to Franklin ?Rusty? Carnes, at the Carnes Brothers Funeral Home in Galveston. He died of natural causes, his family said in a statement.
Mitchell?s innovative use of horizontal wells and hydraulic fracturing in the 1990s to release gas from a previously impermeable rock formation near Fort Worth, Texas, earned him the nickname the ?father of the Barnett Shale.? Those drilling breakthroughs revolutionized oil and gas exploration from Pennsylvania to Poland and the Yukon Territory to Argentina.
?My engineers kept telling me, ?You are wasting your money, Mitchell,?? he told Forbes in 2009. ?And I said, ?Well damn it, let?s figure this thing out, because there is no question there is a tremendous source bed that?s about 250 feet thick.??
As other companies adopted Mitchell?s techniques, U.S. gas production rose 25 percent in the past decade, pushing prices to a 10-year low in April 2012. The nation now has an estimated 890 trillion cubic feet equivalent of recoverable natural gas, according to ITG Investment Research. That?s enough fuel for almost 40 years at current consumption rates.
As the same methods were applied to oil fields, crude production has more than quadrupled in places such as the Bakken formation in North Dakota and Montana in the past three years, according to data compiled by Bloomberg Industries.
Mitchell sold his company, Mitchell Energy & Development Corp., to Devon Energy Corp. in 2002 for about $3 billion, becoming one of the largest shareholders of the Oklahoma City- based gas and oil producer. Forbes magazine ranked him the 239th-richest American in 2012.
The oilman focused on real estate earlier in his career, developing a suburb north of Houston out of 25,000 acres of pine forest. The Woodlands, which opened in 1974, now has a population of 100,000 and includes a mall, a 1.4-mile winding waterway and the 30-story headquarters of Anadarko Petroleum Corp. Exxon Mobil Corp., based in Irving, Texas, is building a 3 million-square-foot campus there.
Mitchell sold the development in 1997 to a partnership of Crescent Real Estate Equities Co. and Morgan Stanley Real Estate Fund II.
Mitchell had the ?guts? to do certain things that other people would be too scared to do, said Michael Richmond, who worked for Mitchell for 25 years, eventually retiring as chief executive officer of the real-estate company that developed The Woodlands.
?George didn?t like to hear the answer no,? Richmond said. ?He always wanted to hear the answer, how. You had to figure out solutions to any issue that was on the table.?
?The Woodlands is a beautiful project,? Mitchell said in a March 2009 interview in his downtown Houston office. ?But energy has been my background.?
George Phydias Mitchell was born in Galveston on May 21, 1919. His parents, Mike and Katina Mitchell, who had come to the U.S. from Greece separately around 1900, ran a shoeshine parlor in Galveston. His father, soon after arriving in the U.S., took the name Mike Mitchell from an employer handing out paychecks who couldn?t say his real name, Savvas Paraskevopoulos, according to an article in the Houston Chronicle.
Mitchell developed a passion for oil and gas while working in the oil fields for his older brother, Johnny, around age 17. He graduated in 1940 with a degree in petroleum engineering and an emphasis in geology from the Agricultural and Mechanical College of Texas, now known as Texas A&M University, in College Station.
After serving as a captain in the U.S. Army Corps of Engineers during World War II, Mitchell in 1946 joined a newly formed oil exploration company, Oil Drilling. That eventually became Mitchell Energy & Development Corp., which went public in 1972. Mitchell and his brother were early partners in the company.
Mitchell participated in about 10,000 wells over his career. His company drilled its first well in the Barnett Shale in 1981 and developed fracturing and horizontal-drilling techniques to unlock gas trapped beneath hundreds of feet of rock, according to Mitchell?s company.
In his late 80s, Mitchell turned his attention back to another shale play, this time bankrolling rigs in the Marcellus Shale in Pennsylvania for a company headed by his son, Todd, and Joe Greenberg, a geologist. The Marcellus Shale has since emerged as the largest U.S. gas resource, holding the equivalent of 330 trillion cubic feet of recoverable gas, according to ITG.
The new abundance of cheap gas transformed the U.S. industrial landscape, prompting new investment in power plants that use gas to generate electricity and accelerating the demise of older coal and nuclear plants that were more expensive to repair and operate.
Chemical manufacturers including Exxon Mobil that use gas as the raw material for their products planned to build new plants in the U.S. to take advantage of the new resources. Pipeline networks to carry the newfound gas to market multiplied across the country. And gas drillers promoted natural gas powered trucks and cars for the nation?s highways and roads.
Import facilities built earlier in the 2000?s, when concerns in the U.S. focused on dwindling oil and gas supplies, are now seeking to add export terminals to send U.S. gas overseas in the form of liquefied natural gas.
?He was a visionary,? said James Rebello, who worked at Prudential Securities when it financed a small part of the exploration and production side of Mitchell?s group. Rebello and his colleagues told Mitchell they could lend him more if he combined the oil & gas business with the real estate unit.
?But he was adamant that he wanted to keep those separate,? Rebello said. ?He was right, and it worked out in the long run.?
Mitchell donated more than $175 million, with the largest gifts going to Texas A&M, the University of Houston and M.D. Anderson Cancer Center. A tennis center at Texas A&M bears his name. His wife, Cynthia, who died in 2009, helped develop the Cynthia Woods Mitchell Pavilion, an outdoor concert venue, in The Woodlands.
In addition to his ?great love? for The Woodlands, Richmond said, Mitchell had ?an enormous passion? for his home town of Galveston, where he bought and renovated older downtown buildings.
Mitchell met his wife while in the Army and married her in 1943. They had 10 children: Pamela Maguire, Meredith Dreiss, Scott Mitchell, Sheridan Lorenz, Mark Mitchell, Kent Mitchell, Greg Mitchell, Kirk Mitchell, Todd Mitchell and Grant Mitchell.
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