Gov. Mark Gordon has a team of seven informal private-sector advisors — at least three of them high-level veterans of the oil and gas industries — helping him evaluate the possible purchase of 1 million surface and 4 million mineral acres from Occidental Petroleum, according to the governor’s office.
Gordon selected the advisers when he began considering the deal, and they have met via occasional conference call to offer the governor advice, according to Gordon’s Energy Policy Advisor Randall Luthi.
The group is unpaid and has no contract with the state of Wyoming, officials said. The advisors, however, appear to have helped shape Wyoming leaders’ thinking on how the purchasing process might proceed — recommending the hiring of a large investment bank to do an appraisal, for example, which lawmakers and others pushing the deal describe as an obvious next step.
Gordon publicly announced his interest in buying the Occidental properties on Feb. 17. Price estimates of the land, which is located in the Interstate 80 corridor, run anywhere from hundreds of millions to billions of dollars.
Before Gordon’s announcement, knowledge of the deal appears to have been limited to top state officials who were briefed or heard rumors of the proposal. Gordon’s office has said his first conversation with Occidental on the possible purchase was in May.
The informal group had been counseling Gordon before the announcement, according to Luthi. The following people are members of the group:
Steven Farris is a former CEO of Apache Corporation, an oil company with roots to Johnson County where Gordon is from. The governor once worked for the company. Farris is a trustee of the Ucross Foundation, which was launched by Apache’s founder, and has a home in Ucross, according to the foundation’s website.
Chad Deaton is a former CEO of Baker Hughes, an industrial service company. Deaton was born in Byron, in the Big Horn Basin, according to a University of Wyoming Foundation profile. Deaton was appointed to the UW Foundation board in 2011. He remains a member of its Vision Planning Committee, according to a UW Foundation webpage.
Greg Hill is the current president and chief operating officer of Hess Corporation, another global energy giant. Hill is broadly connected in Wyoming. He is the president of the UW Foundation Board. He served as the head of former Gov. Matt Mead’s ENDOW council and was on the board for the Wyoming Business Council. He is also on the board of the National Ocean Industries Association, an industry group for offshore drilling. Luthi, who is also a Wyoming native, was president of that lobbying group for almost 10 years before joining Gordon’s association.
Those three have experience in purchasing huge properties and oil and gas assets, Luthi said. “As the governor started talking about this purchase and what kind of info he would need, he thought there’s several people he knows,” with relevant experience, Luthi said.
Two more citizens bring different experiences to Gordon’s informal advisory group, Luthi said. One is Bob King, who serves on the board of UW’s Enhanced Oil Recovery Institute and was formerly director of the Wyoming Oil and Gas Commission under Mead. Another advisor is Fred Parady, a former Speaker of the Wyoming House (as is Luthi). Parady is a former trona miner and in 2011 became the executive director of the Alaska Mining Association.
Proponents of the Occidental land purchase point to trona as one of the more valuable assets in the portfolio. Portions of the surface land under consideration align with the state’s trona deposits, according to Travis Deti, director of the Wyoming Mining Association.
There are two more informal advisors, Luthi said, but he declined to name them because he had not reached them to receive their permission for public disclosure, he told WyoFile.
Luthi described the group to WyoFile following inquiries by the news organization. It appears to be the governor’s office’s first public acknowledgement of its existence.
“Some are in Houston, some are in and out of Wyoming,” Luthi said. “Most of them have a Wyoming connection. It’s how the governor knows them.”
Gordon selected the members based on their experience, Luthi said. “The governor’s pretty knowledgeable about who is in the oil and gas business and who knows something about investments,” he said. “He had a pretty good idea of who he thought might give some good advice.”
Evaluating the deal
Occidental, the behemoth that swallowed Anadarko for a large load of debt, has seen its stock price plunge and it seeks to offload billions of dollars in assets including the properties considered by Wyoming, according to a recent shareholder call.
The advisory group has met once or twice by conference call since the beginning of the session, Luthi said. The group met more frequently before the session, Luthi said. Lawmakers were likely on some of the calls.
“I do believe on some of the early calls that both Eli [Bebout] and [Bob] Nicholas were in on them,” Luthi said. Nicholas and Bebout are the chairs of the House and Senate Appropriations committees, respectively. They are key figures in the effort to pass legislation allowing Gordon to consider the Occidental purchase and have been named by other officials as part of a core group of people in the know on Gordon’s idea.
During debate over the land purchase on the House floor, Nicholas once mentioned an “informal” governor’s working group. In a Feb. 25 email to WyoFile, however, he did not describe that group as including private citizens.
“It is really just a gathering of various staff members, [Wyoming Attorney General’s office], Treasurer’s office and [Office of] State Lands personnel,” Nicholas wrote. “We typically get informal updates about how things are proceeding.”
Exactly how the state is assessing the deal at this point remains somewhat unclear. The informal advisors don’t act as liaisons with Occidental, Luthi said, but instead are offering high-level advice.
“They’re the ones that recommended, ‘well you should start thinking about an investment bank,’” he said, “a bank that’s big enough to actually look at the entire asset, both land and minerals, and give you an idea of the valuation.”
Legislators and other state officials at this point presume the governor’s office would contract with a large investment bank for an appraisal, provided legislation authorizing Gordon to proceed passes. Some officials estimate the cost of that investment bank work to be in the $8-10 million range. Gordon is not required to use the traditional state contracting purchase process for that hire, Luthi said.
“I believe that’s his preference,” he said. The informal advisors could offer advice on that choice, Luthi said.
“They gave suggestions of [which bank] and so as that information comes in we’ll ask them again ‘well do you have a favorite, do you think there’s someone better or worse?’ That kind of advice,” he said.
Gordon does not intend to hire the informal advisors themselves, Luthi said. The advisors Luthi named and their once and current employers do not fit the bill for a large investment bank — financial giants like Barclays or Goldman Sachs are names under consideration, according to sources in the Legislature.
Meanwhile, state employees in the treasurer’s office and the Office of State Lands and Investments have access to a digital “data room” Occidental is populating with information, according to a number of state officials. The company has been uploading files into that virtual workspace slowly, Luthi said. “Those in State Lands that have access to the room have just been saying there hasn’t been a lot in there,” he said.
WyoFile’s inquiry into the land deal evaluation began with a series of records requests for nondisclosure agreements between state employees and the company. State Treasurer Curt Meier told WyoFile in February he had signed a nondisclosure agreement with Occidental.
In an interview, Meier referred several times to a “nondisclosure” that governed what he could and couldn’t talk about. Asked if the nondisclosure agreement he referred to was with Occidental, he said it was. “They’ve got trade secrets,” he said, “they’ve got other players in here that want to buy this.”
The treasurer’s legal counsel subsequently said Meier had not signed such an agreement and that there had been a misunderstanding.
“It sounds like there is a misunderstanding,” house counsel Bill Pilger wrote to WyoFile. “The Treasurer has not signed a NDA with Occidental but believes he may be bound by one signed by the Governor’s Office.”
WyoFile filed records requests for nondisclosure agreements between state officials and Occidental with the Office of State Lands and Investments, the State Treasurer’s Office and the governor’s office. None of those requests turned up any responsive records — meaning, according to the agencies, such documents did not exist.
The state has not signed any form of nondisclosure agreement with Occidental, according to Betsy Anderson, Gordon’s general counsel. “They wanted an NDA and we said we’re not going to sign one,” she told WyoFile on Friday. “We got them comfortable without signing one.”
A nondisclosure agreement signed with a government body likely would have been moot to begin with because of the state’s public record act, according to Cheyenne-based freedom of information attorney Bruce Moats. Judges in Wyoming and other states have consistently ruled that nondisclosure agreements can’t block the release of records that otherwise would be available to the public under state law, Moats said.
The Legislature is broadly exempt from Wyoming public records law, however. The treasurer’s office also has a number of exemptions related to its ability to explore investments, Luthi said.
Both Nicholas and Speaker of the House Steve Harshman (R-Casper) have told WyoFile they have not signed any confidentiality agreements with Occidental. Legislative Service Office director Matt Obrecht said none of his staff has signed a nondisclosure agreement with Occidental, nor have any legislators he’s aware of. “LSO is not in possession of any nondisclosure agreements between Occidental Petroleum and anyone else, including legislators or legislative staff,” Obrecht wrote.
The informal advisors, however, have signed confidentiality agreements with the governor, Luthi said. “The concern was back to [Occidental Petroleum],” Luthi said. The company worried informal advisors might spread information of the deal before the parties were ready for the potential deal to become public knowledge, he said.
I’m posting this on Friday March 20, nine days after the original story…nine days feels like nine months in the current COVID-19 environment. A lot can change in nine days…or one or two days.
The perfect storm of COVID-19 and historic upheaval in the energy and capital markets probably dooms this opportunity, unfortunately. The State and its government leadership are going to be immensely challenged over the next several months dealing with the COVID-19 fallout, and it’s hard to see how a massive investment purchase and all that goes with that (due diligence, transparency, plenty of competing interests, etc.) fits into everything else that will be demanding attention and resources. Plus I don’t think Occidental has the luxury of time to wait around for Wyoming to make a bid; capital markets have clearly spoken that OXY is on life support and OXY will be forced to protect its own interests very soon.
well done Mr Graham.
Re my not yet posted comment, please add if in fact you post it , re: Racich letter, thank you
A couple quick eyebrow raisers here: 1) major oxymoron, legislature integrity, and 2) Wyoming governor/legislature transparency, both provided a good laugh, thanks.
Is there a publicly available GIS description for the parcels involved in this proposed land purchase?
Another great informative article by Andrew Graham.
If any NDA’s are in fact being held in secrecy I hope members of the legislative body have the integrity to bring that information forward.. Hopefully the governor will be up front in any information he and his advisors they glean from their research.
Given the cloak of secrecy that cloaked this endeavor, when it was presented to the legislative body with only days left in the budget session, leads one to believe that transparency is tainted with a black cloud.
Major investment firms should be involved in the information gathering process, and by all means the voting public should at the least have a chance to express their thoughts and opinions at various open sessions in various locations across the state.