New York investors recently exerted control at two Oklahoma City energy companies, claiming strong presences on the boards of directors at Chesapeake Energy Corp. and SandRidge Energy Inc.
During the two conflicts, much of the attention was placed on how outside interests were trying to take over Oklahoma City companies.
While it is true that out-of-state financiers do not have the same priorities for Oklahoma as the companies' homegrown founders and management teams, it is important to remember how these New York hedge funds and outside interests became involved in the Oklahoma City companies in the first place.
They were welcomed — often begged — to invest in Oklahoma companies.
New York hedge funds and pension funds throughout the country have funded much of the oil and natural gas boom Oklahoma energy companies have enjoyed in recent years.
They have paid for thousands of jobs created throughout the Oklahoma oil patch over the past decade.
Becoming a publicly traded company is expensive and time-consuming. The process is not easy, and it exposes companies and their management to considerable risk, up to and including losing control of the business.
So why do they do it? Why would a founder accept the vast cost and risk of taking a private company public?
Simple answer: Money.
Oil and natural gas operations are not cheap.
A single horizontal well can cost $10 million. Power lines, water disposal systems, lease purchases and other costs add millions more.
Oklahoma City's four large, publicly traded energy companies all have billion-dollar annual drilling budgets.
Devon Energy Corp. last year completed its $750 million headquarters buildings.
There's just not that much money in Oklahoma. Or in most states, for that matter.
When SandRidge in 2007 announced plans for its initial public offering, the company said it was making the move in part to raise money to accelerate drilling and to pay for other capital expenditures.
Oklahoma-based initial public offerings raised almost $3 billion from 2005 through 2007 alone, including deals for SandRidge and Continental Resources Inc.
That's money flowing from throughout the country into Oklahoma, funding jobs, construction projects, tax revenue and all other parts of the state economy.