Shale driller CrownRock CEO has potential to reshape Texas politics with potential $10 billion Oxy sale
(Bloomberg) – Oil tycoon Tim Dunn has spent millions to try to influence Texas to lean toward his conservative politics. Now, as he considers bids for his drilling company that’s said to be valued at more than $10 billion amid a merger-mania in the shale patch, Dunn is poised for a windfall that could dramatically boost his giving – and his influence.
The head of CrownRock LP is a devout Christian who has bankrolled candidates and groups that favor his conservative beliefs. He is a patron for immigration hardliners who have pushed to block illegal “asylum-seekers” from crossing the U.S. southern border.
When Republicans are not sufficiently conservative by Dunn’s measuring, he and his allies in the state recruit and fund primary challengers who meet their standards.
Those tactics are sure to make Dunn a potent force in the 2024 election, pulling candidates to the right in races up and down the ballot in the second-most populous U.S. state. His dollars could also shape the presidential contest: He has backed GOP frontrunner Donald Trump before, contributing $300,000 to his 2020 reelection effort. He has not donated this cycle to Trump or any other presidential candidate.
It’s not certain that Dunn would use proceeds from an acquisition to ratchet up his political donations. Officials at his company declined to comment about its potential sale. But close observers of Texas politics say they expect his giving could increase if he sells his company.
Wherever Dunn decides to flex his political muscle, he’ll have the help of former Trump digital strategist Brad Parscale, who has relocated to the West Texas desert and is consulting for an advertising company that a Securities and Exchange Commission filing shows Dunn has financed.
Since 2011, Dunn has made political donations to candidates and committees at the federal level and in Texas totaling $31.9 million. He was the nation’s 65th-largest donor to super political action committees in the 2022 election cycle, according to OpenSecrets.
Power broker. A wave of consolidation in the shale industry could soon make Dunn an even more formidable power broker: The likes of Occidental Petroleum Corp., Devon Energy Corp. and Diamondback Energy have eyed closely held CrownRock as an acquisition target, according to people familiar with the situation who were not authorized to discuss the matter because the bidding process is private.
A sale would score its owners — which include Dunn and private equity firm Lime Rock Partners — a massive payout. It could also have lasting implications for Texas’s political landscape.
“If he pulls this off, he can seriously change politics for the next 10 years,” said Republican donor Bryan Sheffield, a prominent figure in the Texas oil industry and billionaire founder of Parsley Energy who regularly donates to Republican candidates.
Dunn, 67, who delivers sermons at an evangelical church in his hometown of Midland, Texas, and founded a private Christian school, stands apart from other big Texas GOP donors – including pipeline magnate Kelcy Warren and real estate mogul Harlan Crow — because the interests of his industry don’t appear to be the primary driver of his giving.
“It’s been much more with an ideological and policy agenda” for Dunn, said Mark Jones, a political science professor at Rice University in Houston.
Lasting Franchise . Dunn grew up just outside Midland, in Big Spring, Texas, on a flat expanse of the Chihuahuan Desert. His father was a farmer who never graduated high school. Dunn became an Eagle Scout, played guitar in a rock band and married his wife after their junior year at Texas Tech.
In an October address from his church’s pulpit, Dunn warned the congregation against being overly focused on immediate gratification.
“The best investments take time,” he said.
Dunn certainly has shown patience in building his own business empire. It has taken more than a decade to grow CrownRock into one of the Permian basin’s most-prized assets.
Through Dunn’s other company – CrownQuest Operating LLC, which manages the assets of CrownRock – production has climbed by 15% through the first six months of this year, according to industry data provider Enverus. That’s on top of last year’s 21% output growth and the 36% expansion in 2020, according to CrownQuest.
With core inventory spread across 94,000 net acres, CrownQuest is tied with Double Eagle Energy Holdings IV LLC as the second-most active private driller, with five rigs working in the Midland basin of the Permian.
“He’s built a lasting franchise,” said Steve Pruett, a Midland oil explorer who has known Dunn for roughly three decades.
Indeed, five of his six children work in the oil sector. (The one who isn’t in the business, David Dunn, is a Christian singer-songwriter. The father and son jam together sometimes, with the elder picking the guitar or mandolin.)
More than a decade after the shale revolution upended global energy markets, some companies have exhausted their most prolific rocks and are moving to scoop up quality replacements. That’s what Exxon Mobil Corp. did this fall when it agreed to purchase Pioneer Natural Resources, the Permian’s biggest independent producer, for $60 billion.
Against that backdrop, Dunn is weighing a sale of CrownRock.
