George P. Mitchell, the Texas billionaire who pioneered shale-drilling techniques that triggered a renaissance in North American oil and natural gas production, died July 26 in Galveston, Tex. He was 94.
Mr. Mitchell’s family announced his death on the Cynthia and George Mitchell Foundation Web site but did not disclose the cause.
Mr. Mitchell’s innovative use of horizontal wells and hydraulic fracturing, or fracking, in the 1990s to release gas from a previously-impermeable rock formation near Fort Worth earned him the nickname the “father of the Barnett Shale.” Those drilling breakthroughs revolutionized oil and gas exploration from Pennsylvania to Poland and the Yukon Territory to Argentina.
“My engineers kept telling me, ‘You are wasting your money, Mitchell,’ ” he told Forbes magazine in 2009. “And I said, ‘Well damn it, let’s figure this thing out, because there is no question there is a tremendous source bed that’s about 250 feet thick.’ ”
As other companies adopted Mr. Mitchell’s techniques, U.S. gas production rose 25 percent in the past decade, pushing prices to a 10-year low in April 2012. The nation now has an estimated 890 trillion-
cubic-feet equivalent of recoverable natural gas, according to ITG Investment Research. That’s enough fuel for almost 40 years at current consumption rates.
As the same methods were applied to oil fields, crude production has more than quadrupled in places such as the Bakken formation in North Dakota and Montana in the past three years, according to data compiled by Bloomberg Industries.
Mr. Mitchell sold his company, Mitchell Energy & Development Corp., to Devon Energy Corp. in 2002 for about $3 billion, becoming one of the largest shareholders of the Oklahoma City-based gas and oil producer. Forbes ranked him the 239th-richest American in 2012.
The oilman focused on real estate earlier in his career, developing a suburb north of Houston out of 25,000 acres of pine forest. The Woodlands, which opened in 1974, now has a population of 100,000 and includes a mall, a 1.4-mile winding waterway and the 30-story headquarters of Anadarko Petroleum Corp. Exxon Mobil Corp., based in Irving, Tex., is building a 3 million-square-foot campus there.
Mr. Mitchell sold the development in 1997 to a partnership of Crescent Real Estate Equities and Morgan Stanley Real Estate Fund II.
George Phydias Mitchell was born in Galveston on May 21, 1919. His parents, who had come to the United States from Greece separately around 1900, ran a shoeshine parlor in Galveston. His father, soon after arriving in the United States, took the name Mike Mitchell from an employer handing out paychecks who couldn’t say his real name, Savvas Paraskevopoulos, according to an article in the Houston Chronicle.
Mr. Mitchell developed an interest in oil and gas while working in the oil fields for his older brother, Johnny, around age 17. He graduated in 1940 with a degree in petroleum engineering and an emphasis in geology from the Agricultural and Mechanical College of Texas, now known as Texas A&M University, in College Station.
After serving in the Army Corps of Engineers during World War II, Mr. Mitchell in 1946 joined a newly formed oil exploration company, Oil Drilling, which eventually became Mitchell Energy & Development Corp. and went public in 1972. Mitchell and his brother were early partners in the company.
Mr. Mitchell participated in about 10,000 wells over his career. His company drilled its first well in the Barnett Shale in 1981 and developed fracturing and horizontal-drilling techniques to unlock gas trapped beneath hundreds of feet of rock, according to Mr. Mitchell’s company.
In his late 80s, Mr. Mitchell turned his attention back to another shale play, this time bankrolling rigs in the Marcellus Shale formation in Pennsylvania for a company headed by his son Todd and Joe Greenberg, a geologist. The Marcellus Shale formation has since emerged as the largest U.S. gas resource, holding the equivalent of 330 trillion cubic feet of recoverable gas, according to ITG Investment Research.
The new abundance of cheap gas transformed the U.S. industrial landscape, prompting new investment in power plants that use gas to generate electricity and accelerating the demise of older coal and nuclear plants that were more expensive to repair and operate.
Chemical manufacturers, including Exxon Mobil, that use gas as the raw material for their products planned to build new plants in the United States to take advantage of the resources. Pipeline networks to carry the newfound gas to market multiplied across the country. And gas drillers promoted natural gas-powered trucks and cars for the nation’s highways and roads.
Import facilities built earlier in the 2000s, when concerns in the United States focused on dwindling oil and gas supplies, are now seeking to add export terminals to send U.S. gas overseas in the form of liquefied natural gas.
“He was a visionary,” said James Rebello, who worked at Prudential Securities when it financed a small part of the exploration and production side of Mr. Mitchell’s group. Rebello and his colleagues told Mr. Mitchell that they could lend him more if he combined the oil and gas business with the real estate unit.
“But he was adamant that he wanted to keep those separate,” Rebello said. “He was right, and it worked out in the long run.”
Mr. Mitchell donated more than $175 million, with the largest gifts going to Texas A&M, the University of Houston and MD Anderson Cancer Center. His wife, Cynthia, who died in 2009, helped develop the Cynthia Woods Mitchell Pavilion an outdoor concert venue, in The Woodlands. The Mitchells had 10 children.