Billionaire Fracking Brothers Hit Hard by Permian Holdings



Billionaire Fracking Brothers Hit Hard by Permian Holdings
Two brothers hit pay dirt during the shale boom when they sold their Texas fracking company in 2011 for $3.5 billion. But many of their more recent investments in the Permian have turned to dust.

The Wilkses’ post-crash investment optimism has proven to be misplaced.

Carbo Ceramics Inc., the Houston-based frack-sand supplier that counts the duo as it’s second-biggest investor, warned this month that it may fail as a going concern after its biggest customer halted purchases. The stock has plunged 72% since the Nov. 8 announcement.

Carbo and other oilfield-services companies are seeing demand evaporate as explorers rein in spending to mollify investors insisting they prioritize shareholder returns over production growth.

Still, the brothers do have at least one big advantage, said Neal Dingmann, an analyst at SunTrust Robinson Humphrey.

“Time is one their side,” he said. “If they had bought this on private equity’s dollar they would be on the clock. Because this is their own money, then they’re on their own time frame.”

--With assistance from David Wethe, Rachel Adams-Heard and Suzanne Woolley.

To contact the reporters on this story:
Emma Vickers in New York at evickers4@bloomberg.net;
Joe Carroll in Houston at jcarroll8@bloomberg.net;
Tom Maloney in New York at tmaloney38@bloomberg.net

To contact the editors responsible for this story:
Pierre Paulden at ppaulden@bloomberg.net;
Simon Casey at scasey4@bloomberg.net
Peter Eichenbaum


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WHAT DO YOU THINK?


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Alan Seeling  |  December 10, 2019
Our bust is another example of Wall Street's short sightedness demanding their returns today instead of tomorrow. How many times does our industry have to tolerate their irrational interference in our business. Just because they have today's cash they think they know the business. Its just like Hollywood stars philosophising about global warming. Being ignorant is no defense.
td  |  November 23, 2019
What a shame. Boo Hoo
Luis Tovar  |  November 22, 2019
Great notes in this article...good gambling no doubt! The very essence of our industry...rebounds seem to be fewer and far between but still up to the gamblers. Stay tuned...