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Plank, 86, calls it a day at Apache

Plank, 86,  calls it a day at Apache
Apache's founder and chairman, Raymond Plank has finally packed his pipe rack and vacated his office at company HQ in Houston after five decades of building the company into one of the largest and most successful American oil independents.

Apache’s founder and chairman, Raymond Plank has finally packed his pipe rack and vacated his office at company HQ in Houston after five decades of building the company into one of the largest and most successful American oil independents.

From initial seed capital of $250,000 at founding, under Plank’s leadership, Apache’s market value has grown to about $25billion.

“I put in $5,000 … had to borrow that,” he told Energy during a visit in May, 2003.

“We were incorporated in December, 1947, opened an office in Tulsa, Oklahoma; had our headquarters in Minneapolis.”

One share of stock purchased at inception now has a basis of four cents after adjustment for splits and stock dividends; that share is worth $73 today, having multiplied 1,700 times.

Known for his frank talk and independent thinking – he had neither an engineering, geological nor geophysical background, but had been a World War II bomber pilot, then a book-keeper – Plank established a culture at Apache that pursued a highly distinctive growth strategy over the decades.

For example, with oil&gas commodity prices regulated at low levels during the 1960s, Plank built Apache into a mini-conglomerate.

He later noted: “Sometimes, the best way to grow a portion of our oil&gas business was to be out of it; rather than trying to drill through or climb the mountain, we went around it, gaining strength while doing so.”

In 1981, the Plank team created the world’s first “aster limited partnership”, which provided Apache with valuable acquisition currency with which it gained critical mass during the brutal industry downturn of the 1980s. As the Reagan administration felled the “evil Russian empire,” the collateral damage wiped out most smaller oil&gas companies.

As other independents retreated to the US in the late-1980s, Plank steered Apache into the international arena to access larger reserve targets.

In the early-1990s, Apache fine-tuned its “acquisition and exploitation” strategy.

Describing the company’s characteristic approach of squeezing value out of properties acquired from larger companies, Plank told The Wall Street Journal: “We’re a bit like pigs following cows through a cornfield.

“The scraps are pretty good for a company with our particular strategy.”

One of those cast-offs was BP Forties, which has since proved a shrewd investment for the company.

More recently, Plank has been determined and vigilant in fortifying Apache’s financial strength. Avoiding industry trends such as share repurchases and acquisitions at peak prices, Apache, under this remarkable individual’s leadership, opted instead to pay down debt and build cash balances in preparation for the resumption of growth through increased acquisition, exploration and exploitation activity.

“It’s been a great run,” Plank said.

“I leave Apache with cash on hand, debt under 20% of capitalisation, quality properties, operations diversified across five continents and motivated, capable personnel who have grown with the company.”

Plank’s name is also written into the history book of both the US petroleum industry and American corporate finance for the role he played in exposing the Enron scandal.

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