Schusterman Caps Israel-to-Tulsa Oil Career With KKR Sale

Samson Investment Co. CEO Stacy Schusterman
Samson Investment Co. Chief Executive Officer Stacy Schusterman. Photographer: F. Carter Smith/Bloomberg

Stacy Schusterman, the only daughter of Oklahoma oil man Charles Schusterman, was studying abroad in Israel in 1983 when her father arrived to ask her a question.

He had been diagnosed with a rare form of leukemia and needed to know her plans for the future: Would the 20-year-old come home to run the oil and natural gas company he’d built from scratch and named for his father? Or should he sell?

Stacy Schusterman put her studies on hold and returned to Tulsa, Oklahoma, where she began preparing for a life in the petroleum business. Today, as chief executive officer of Samson Investment Co., Schusterman said she is selling most of the closely held company to KKR & Co. for $7.2 billion as the private equity firm seeks more energy acquisitions. The sale will be the largest-ever leveraged buyout of an oil and gas producer, according to data compiled by Bloomberg.

By the time her father died in 2000, Stacy was armed with a Yale University degree, an MBA from the University of Texas at Austin and more than 10 years at her father’s side in a role she jokingly called, “assistant to the big cheese,” according to colleagues.

“I fell in love with the oil and gas business, because the business combines financial, technical and operational skills, and is at the center of the world economy,” Stacy said in a statement to Bloomberg. “I also really liked the idea of working with my dad.”

Shuns Spotlight

Schusterman is known in Tulsa as an intensely private person, devoted to creating a down-to-earth environment to raise her three children and shunning the spotlight while using her personal wealth to support causes in education, the arts and the Jewish community. She’s on the boards of the American Israel Public Affairs Committee, Hillel and BBYO, a group that that sponsors Birthright Israel trips for young people.

She runs her company in an equally private way, say Tulsa business and city leaders. Samson, the largest U.S. oil and gas company with a woman as CEO, rarely holds news conferences and Schusterman seldom speaks to the press. She and Samson spokesman Dennis Neill declined to answer questions about motives for the sale. Schusterman declined to be interviewed for this article.

First as co-CEO, and then flying solo, Stacy, 48, built the Tulsa-based family company into one of the most successful independent producers in the U.S. with 1,200 employees and operations in some of the most lucrative oil and gas fields in the U.S., according to the company’s website and a statement Samson released to the Tulsa World newspaper last month. The company received 12 permits in the Bakken formation in North Dakota in the second quarter of 2011, Bloomberg data show.

Drilling Strategy

During her tenure as CEO, Stacy Schusterman gradually shifted the company’s drilling strategy to take on riskier, more expensive projects and include more oil in the company’s portfolio. She sold Samson’s international assets to refocus on U.S. shale fields as improved technology enabled growing oil and gas production in those previously inaccessible rock formations.

With today’s deal, Schusterman made the decision she rejected in Israel 28 years ago. She’s selling Samson. Schusterman and her family will continue to operate the company’s onshore Gulf Coast and offshore deep-water Gulf of Mexico assets.

When Charles Schusterman had to decide which of his three children should follow in his footsteps, Stacy stood out over her two brothers as the natural heir to his company because of her educational goals and business aptitude, her father’s friends and business associates said.

Comparison to Brothers

“She’s smart as hell,” Mike Cantrell, owner of Cantrell Investments LLC, an oil and gas producer in Ada, Oklahoma, said. “She’s the one who seemed to always be involved. There was no question among any of us who would take over.”

In the early years building his company, Charles Schusterman drilled wells cautiously, thoroughly reviewing results from one well before moving ahead to drill more around it, said Mike McDonald, co-owner of closely held oil company Triad Energy Inc. in Oklahoma City. Schusterman had started his career in the pipe supply and salvage business, an area that many young Jewish people in Oklahoma were in at the time, according to Melvin Moran, who attended high school with him.

At an industry meeting 15 years ago, Charles warned his peers to practice moderation even as oil and gas prices were climbing. “What goes up, must come down,” McDonald recalls him saying. McDonald still tells his partner to remember Charles Schusterman before rushing ahead with any new plan, he said.

Unocal Mentor

After years of aggressive treatments to beat back the blood cancer diagnosed as chronic myelogenous leukemia, Schusterman’s health worsened. A year before he died, he decided to bring in Jack Schanck, an executive at Unocal Corp., then one of the country’s top 10 oil and gas producers, to help Stacy learn more about the strategic management of a growing company.

Stacy was elevated to share the CEO job with Schanck in 1999. After her father died in December 2000 they began studying a broader swath of opportunities to expand the company, he said.

Her father had preferred drilling for gas, which he saw as a cleaner, domestic alternative, said Cantrell. Stacy gradually shifted the company’s fuel mix to include more oil, to protect against fluctuating gas prices, said Schanck, who now is CEO of Sonde Resources, an oil company in Calgary. Samson’s production is now about 30 percent oil, according to its website.

Gulf of Mexico

Stacy Schusterman expanded the Houston office to 50 employees today from about three at the time her father died. A bigger presence on the Gulf Coast allowed Samson to build its offshore portfolio. Samson and its subsidiaries now have a stake in 57 Gulf of Mexico leases, according to data compiled by the U.S. Bureau of Safety and Environmental Enforcement.

Schanck left Samson in 2005 to run Southview Energy LP. In the last almost seven years, Schusterman has ramped up the scale of Samson’s projects, going after more unconventional resources such as shale and tight-gas, which require specialized technology to tap, according to a presentation she gave an energy conference in Houston earlier this year.

The company spends about $1 billion annually on capital projects, according to its website, in line with oil and gas companies such as Range Resources Corp., which has a market valuation of about $11 billion, according to Bloomberg data.

‘Tight Ship’

“Stacy runs a tight ship,” said Stephen Heyman, a managing partner at Nadel & Gussman LLC in Tulsa. “There’s no executive dining room, there’s no hangar out at the airport with Samson’s name on it. She knows what to spend money on, she knows where the return is going to be.”

Henry Kravis, 67, co-founder of New York-based KKR, traveled to his hometown of Tulsa in July to meet her and discuss the acquisition, people familiar with the talks said. The trip eased her concern about outsiders moving the company’s home base and laid the foundation for the buyout, the people said.

Scaling back her work at Samson may give Schusterman the chance to pursue her other interests.

The Charles and Lynn Schusterman family foundation gives about 25 percent of its donations each year to causes in Tulsa, spending the rest on Jewish organizations around the world. The charitable foundation of which Stacy Schusterman is president, called Bezalel, primarily gives to Jewish, educational and medical causes, according to its most recent available IRS filing. She and her husband, Steven Dow, have been large contributors to events and programs in Tulsa ranging from soup kitchens to educational initiatives.

Low Profile

While running Samson, Schusterman founded a commercial real estate firm, Granite Properties Inc., and established Black Coral Capital, an alternative-energy investment group in New York.

While she plays an active role in Tulsa and in the energy industry, Schusterman’s friends and colleagues say she prefers to keep a low profile.

Samson was taking its 30th anniversary photo, and the photographer expected Schusterman and Schanck to stand in the front.

“She looked at me, I looked at her, and I could see it in her eyes, and I said ‘no, I think we’ll stand in back,” Schanck remembered. “In the end we stood in front because that it what leaders do.”

The sale of Samson to a private equity firm and appointment of Samson’s Chief Operating Officer David Adams as CEO will allow Schusterman to continue to operate in the private way she prefers.

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