Bloomberg News

‘Cookie Duster’ Oil Executives Get Better Returns, Analyst Says

October 05, 2011

Oct. 5 (Bloomberg) -- Oil and natural-gas companies with executives who sport a mustache, a facial feature donned by Confucius, Einstein and Magnum P.I., had better returns during the past decade than those without the “cookie duster,” according to Global Hunter Securities LLC.

Among 104 U.S. exploration and production companies surveyed, 29 had at least one senior executive with facial hair, Michael Bodino, managing director at Global Hunter in Fort Worth, Texas, wrote today in a note to investors. Those with the “soup strainer” generated a 17 percent compounded annual growth rate over the past 10 years while those with only clean- shaven senior management grew 8 percent.

Leading the “hairy lip hall of fame” is Roger Manny, chief financial officer at Range Resources Corp., which had a compound annual growth rate of 147 percent since he joined in 2003, according to the note.

Mustachioed executives successfully sold oil and gas companies. Chairman Bob Simpson sold XTO Energy Inc. to Exxon Mobil Corp. for $34.9 billion last year, a 26 percent premium to the share price. Petrohawk Energy Corp. President Dick Stoneburner sold the company to BHP Billiton Ltd. for $14.9 billion, a 61 percent premium, in August.

Companies with clean-shaven executives have beaten their competitors in the recent “challenging” market, Bodino wrote. “But as true flavor saver enthusiasts know, like a company, a good ’stache takes time to grow.”

--With assistance from Jim Polson in New York. Editors: Jessica Resnick-Ault, Tina Davis

To contact the reporter on this story: David Wethe in Houston at dwethe@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net


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