Word: petroleum
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...early 1980s, Pickens began searching for riches on Wall Street, where one of the great roller-coaster rides in history was turning oil stocks into a bargain. Shares of the major petroleum producers had climbed sharply after 1979, when the Organization of Petroleum Exporting Countries nearly tripled the cost of oil. But then the price began dropping after 1982 as a world glut of oil developed. U.S. energy reserves, meanwhile, were dwindling. Pickens realized that oil company stocks were undervalued, and that it was both easier and smarter to get new oil reserves by taking over a company than...
...which Pickens formed in 1964. Some properties acquired by Mesa rose staggeringly in value. In 1959, for example, Pickens scraped together $35,000 to invest in drilling sites in Canada. Mesa sank the income from those sites into new wells and in 1979 sold its Canadian operations to Dome Petroleum for $600 million...
...minute detail. "By the time my guys get through with the numbers," Pickens says, "we know those companies better than they know themselves." The team spends months sifting reams of public documents, including the annual reports and other resources kept in Mesa's extensive library of the U.S. petroleum industry. The researchers focus on a firm's domestic oil and gas reserves and feed their data, along with such matters as projected interest rates and energy prices, into a computer...
...that Pickens took aim at Cities Service, an Oklahoma firm whose sales were nearly 20 times Mesa's. It proved badger tough, however, and nearly succeeded in swallowing Mesa by bidding for its stock before finally calling it quits and selling out to Occidental Petroleum. That hectic skirmish brought the Mesa group a $31.5 million profit and taught it some lessons. "Mesa had insufficient financial muscle throughout that fight," says Assistant Vice President Sidney Tassin. "We had a good idea but not enough money to back...
...battle for Phillips Petroleum turned into a bruising and emotional struggle. When Pickens tried to buy it late last year, the company, which produces Phillips 66 gasoline, responded with a barrage of suits. Phillips also had the entire headquarters town of Bartlesville on its side. Local churches held 24-hour prayer vigils to drive off Pickens, and BOONE BUSTERS T shirts sprouted everywhere. At a public meeting, nearly 4,000 people belted out an anti-Pickens song (chorus: "There's gonna be a meeting at the old town hall tonight/ And if they try to stop us, there's gonna...