The millennials are coming to the oil patch. It's the latest sign of frothiness after a prolonged period of otherwise rational exuberance in the U.S. oil and gas sector.
Consider Griffin Perry, 30, a former banker and Texas Governor Rick Perry's son. Perry and partners at Grey Rock Energy Partners are taking minority stakes in shale wells. They've raised $40 million so far, and Perry has threatened to grow a mustache if that number hasn't hit $200 million by August.
There are a lot of shale prospecters like Perry out there. If every one of them made pledges like that, we might see record facial hair production levels in corporate America.
Or consider 27-year-old Mark Hiduke, who just raised $100 million to build his three-week-old company, according to a story by Isaac Arnsdorf of Bloomberg News.
Oil billionaire T. Boone Pickens has never seen anything like it. The industry's freshman class is sipping bourbon and eating $49 steaks in fancy private clubs.
It's not just millennial fever. Bubble-like excitement is already popping up elsewhere in the industry. Companies are so eager to grab a stake in the U.S. energy boom that they're building pipelines "before getting the traditional commitment from drillers that anyone will actually use them," Arnsdorf reported on May 6.
In other words, the companies are taking on risk that the oil won't flow.
Investors in these shale firms are taking on risk that youthful entrepreneurs will survive inevitable swings in the market down the road. “What’s going to happen when the older folks retire, we don’t know,” said Matt Miller, 30, who is Griffin Perry's partner at Grey Rock. “You’re going to see a lot of volatility. You’re going to see young people making decisions that were handled by predecessors who had more experience.”
It's enough to make a guy wonder what happened to so many of the young dot-com entrepreneurs who made decisions that were handled by predecessors who had more experience.
More by Eric Roston (@eroston on Twitter):
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