Natural gas prices fell from $8 to $2 per million cubic feet during the 2008 to 2009 downturn, a collapse that hit the Barnett Shale hard just as its boom was losing steam. For Kelcy Warren, whose Energy Transfer Partners depended heavily on gas transport at the time, the drop was a warning he could not ignore.
Rather than wait out the slump, Warren and his executive team began quietly assembling a series of acquisitions meant to diversify the company away from its near total reliance on one commodity stream.
A Deal Done in a Weekend
The clearest sign of that urgency came in March 2011, when Energy Transfer moved to acquire the natural gas liquids assets of Louis Dreyfus for roughly 2 billion dollars. With only a narrow window to close the transaction, Kelcy Warren called an emergency board meeting on a Friday night, pitched the deal, secured approval, and announced it the moment markets opened.
That kind of speed became something of a signature. Warren has described the company’s approach as bold and willing to move while competitors hesitate, crediting a management team he calls hardworking and quick to communicate.
From One Trick Pony to Diversified Player
Before the reinvention, Energy Transfer was nearly all natural gas. Warren has said the company was 99.9 percent gas driven before shifting toward a mix of oil, natural gas liquids, and refined products, a change he compares to a natural hedge against swings in any single commodity price.
The strategy paid off. What began as a defensive move during a painful price collapse eventually became the foundation for a company that now touches nearly every major hydrocarbon stream moving through the United States, from the Permian Basin to the Gulf Coast and beyond. Refer to this article for more information.
Learn more about Kelcy Warren on https://www.hartenergy.com/hall-fame/2023/kelcy-warren/