This Oil Tycoon And Ayn Rand Fan Says ‘I Feel Better Living In Texas’
Bud Brigham’s headquarters is on the west side of Austin perched above the Colorado River. He’s been based there for 20 years, happily removed from the oil capital of Houston. The mood in his office was decidedly casual — fitting for this college town. And why not? Brigham recently closed on the sale of Brigham Exploration (and its 80,000 acres in the Permian basin) for $2.55 billion to Diamondback Energy. It was his second score of the shale boom. Back in 2011 he sold publicly traded Brigham Oil & Gas to Statoil for $4.4 billion, part of the Norwegian giant’s $20 billion push into American oil.
Forbes estimates Brigham has made about $300 million off his deals. But at 57, he’s not about to quit. “We’re restarting. It’s such a remarkable time for our industry. Too much opportunity.” He agrees with other CEOs that Permian output could quadruple to 8 million barrels per day in a decade. U.S. output could double.
His Brigham Minerals buys up mineral interests. Atlas Services provides water and sand to drillers. And then there’s Anthem Productions, his movie business. I had heard about one movie he’d backed — My All-American (2015), a sports-driven, “positive values” flick starring Aaron Eckhart, by the writer of Rudy and Hoosiers.
He’s backed two other movies, less anodyne, more odd: Atlas Shrugged II (2012) and Atlas Shrugged III (2014). He got involved after filmmakers tackled the first part of Ayn Rand’s epic novel, but couldn’t find backing to complete the series.
“I’m a big Ayn Rand fan,” says Brigham. “I really got deep into it in my late 20s. Since then I’ve been involved in trying to spread her word around.” Rand’s work, including her other giant novel The Fountainhead and novella Anthem, constitute holy writ for Brigham. The bumpersticker on his Audi asks the central question of Atlas, “Who Is John Galt?” He funds programs at the Ayn Rand Institute, which every year distributes thousands of copies of the books to high school students.
He wishes he had read the books earlier in his own life, and says that if only one student reads and is motivated by the books, it’s all worth it. For Brigham, Rand’s core message was about “promoting individual liberty” — which to his eyes remains the single greatest contributing factor in what has made America great. Rand’s theory of objectivism is a clarion call to ego-driven overachievers everywhere to throw off the naysayers and moochers and push forward in erecting their monuments to free market capitalism in the form of railroads, copper mines, oil fields and perpetual motion machines. Young Bud was particularly inspired by Rand’s architect character Howard Roark in the Fountainhead — modeled on Frank Lloyd Wright.
Brigham grew up in Midland, Texas, heart of the Permian oil patch. His father split the scene when he was young, leaving his mother with six kids. She worked for Midland oil companies — “good models” for Brigham. At the University of Texas he fell in love with geophysical engineering, which led to jobs doing innovative work in 3-d seismic imaging at companies like Rosewood Exploration. Brigham launched his own company in 1990 with $25,000. He later attracted the backing of investors like Alex Cranberg and General Atlantic; they took it public in 1997. In the early days of the shale boom, Brigham jumped headfirst into the Bakken play, competing against the likes of EOG Resources and Continental Resources. By the time Statoil bought the company, Brigham had assembled 400,000 acres in the Bakken.
At times he felt like he was living in a Rand novel. In Atlas Shrugged, Rand created an oil tycoon character named Ellis Wyatt, who made his fictional fortune figuring out how to coax oil out of Colorado’s thick layers of shale. A half-century later real-life oil mavericks like Harold Hamm, Mark Papa, Aubrey McClendon and Brigham, made Rand’s fictional breakthroughs come true.
I ask Brigham, Where’s the best place to be in the oil business? “North Dakota is wonderful, but west Texas is the best. Very low population.” And the one of the world’s biggest oil fields, in the Permian basin. Brigham in 2012 started his next iteration, Brigham Resources, with backing from Warburg Pincus, Pinebrook and Yorktown. Brigham stepped into the chairman’s role, with Gene Shepherd as CEO. The decision to sell to Diamondback wasn’t difficult. Permian valuations have soared as the play has emerged as America’s repository of low-cost, short-cycle oil. The Diamondback deal valued Brigham’s 80,000 Permian acres at about $25,000 each. He says they could have taken the company public and probably gotten $40,000 an acre, but it would have taken a lot longer. In the age of Sarbanes-Oxley, being a public company CEO is no fun, says Brigham. They made out ok — more than tripling about $700 million of invested capital in five years.
If you like Atlas Shrugged, you’ll enjoy the 2011 movie. Actress Taylor Schilling was a compelling Dagny Taggart. Brigham liked it enough to put up millions for the next two. Which unfortunately turned out amateur and schlocky (Schilling was not available to reprise Dagny). He acknowledges the shortcomings and imagines that some day filmmakers will do justice to the story. He’d like to see it done as a Netflix-quality miniseries.
Interest in Ayn Rand jumped during the Obama years. She is popular among Tea Party types (like big Rand fan House Speaker Paul Ryan). Rand readers are pro-business, pro-gun, anti-government, low-tax. When it comes to social issues they tend to be live-and-let-live. They’re more likely to own their own business and abhor America’s creeping socialism, political correctness and obsession with “fair.”
“What’s happened over the last 8 years is right out of Atlas Shrugged,” says Brigham. Really? I ask. The Obama years were incredible for the oil and gas industry. The shale gas boom happened under Obama. Under Obama America’s oil production doubled to 9.6 million bpd. Perhaps most incredibly, oil production out of the Gulf of Mexico recovered from lows after the BP Deepwater Horizon spill to hit an all-time high of 1.6 million bpd.
Brigham says the Obama EPA singled him out for attack. He gets up from his chair and fetches a framed article about his fight against federal prosectors who in 2011 sued seven North Dakota oil drillers for killing 28 migratory birds that ended up dead near ponds holding waste water from drilling. The government threatened Brigham, as CEO, with a year in prison, 6 months for each of the birds found in his ponds. The oilmen refused to settle with the EPA and fought the charges. A judge threw out the case a year later. It disgusts Brigham that the EPA didn’t go after window manufacturers for killing birds. According to the Fish & Wildlife Service, oil waste pits kill about 750,000 birds a year. Collisions with building glass: 300 million. Cats: 2 billion.
Brigham loves everything that Trump has been doing to slash Obama-era regulations and neuter the EPA. “The Clean Power Plan would have meant a federal takeover of energy, disastrous for the country.” He voted for Trump, though as a candidate and ideologue, the oil man prefers Ted Cruz, and displays a picture with the senator in his office. Trump is not a Rand-ian, explains Yaron Brook, executive director of the Ayn Rand Institute. “He’s not an objectivist. His views are not consistent with laissez faire capitalism. He is an unknown.” Ayn Rand acolytes like Trump’s promises to cut corporate taxes. But get nervous when Trump threatens to tear up NAFTA and slap import duties on Chinese and Mexican goods. And this obsession with a border wall is “ludicrous,” says Brook. “A nation’s responsibility is to protect its people, but there is no invading army, no mass migration like in Europe. What are we afraid of? It’s a symbol of America running scared. A confident America would never build a wall.”
Brigham intends to keep investing his millions to back the spread of Rand’s writings. Even in America, he fears, liberties are not guaranteed, they have to be protected. At least as long as Trump is in office Brigham doesn’t anticipate any replays of Atlas Shrugged where Ellis Wyatt set fire to his oil fields rather than hand them over to the government for social redistribution. “I tell you what,” he says. “I feel better living in Texas.”