BUSINESS WEEK has a cover story this week about the troubles of Richard Rainwater's empire. Defying the conventional wisdom, Rainwater maintains that oil prices will rebound to between $20 and $40 per barrel in 2-5 years. See excerp below:
From here on, Moore and Goff will handle Rainwater's new investments through a vehicle named Goff
Moore Strategic Partners. ''I'm passing the dealmaking mantle on to Darla and John,'' Rainwater says.
So far, Goff Moore has been moving slowly, buying oil and gas stocks, mortgage-backed securities,
and high-yield bonds. ''Things are still brutal,'' says Moore.
Rainwater found that out in the oil market. He maintains that rising global demand will push oil prices
up to somewhere between $20 and $40 a barrel in two to five years. With crude hovering at $13,
Rainwater reckons OPEC has miscalculated by failing to adjust to weak Asian demand. But he says
that's a temporary development and he has sunk 20% of his fortune into the sector. ''It takes an
enormous amount of self-confidence to stick to your guns when everybody around you is saying it'll
never work. But that has been the key for Richard,'' says Moore. ''Nobody can talk him into or out of
something once he has made a decision.''
Rainwater's Pioneer crew, led by CEO Scott D. Sheffield, is hunkering down. Having lost $103.6
million so far this year, it laid off 350 employees and sold $410 million worth of oil and gas fields in
Texas and Oklahoma. And sources say more restructuring is coming. ''Rainwater and Sheffield are
making the right moves,'' says Leigh Goehring, vice-president at Prudential Investments, which
boosted its Pioneer stake in October. |
