* Pickens recovers from his losses
* Net worth dropped 66 percent
* Texas tycoon goes long natural gas futures
* Investing in potential takeover targets
* Sees U.S. oil prices rising to $90 in 2010, $100 in 2011
(Updates with interview, adds byline)
By Joshua Schneyer and Edward McAllister
NEW YORK, Jan 19 T. Boone Pickens, the 81-year
old Texas energy tycoon, is recovering from major losses he
incurred in oil and equities trading in 2008, by betting on a
gradual rise in natural gas prices as the United States moves
toward cleaner fuels.
In an interview Tuesday, Pickens said his net worth, which
rose to $3.5 billion in 2007, plunged by two-thirds in 2008 to
as little as $1.2 billion, a loss he called "a serious
Oil prices hit a record near $147 a barrel in mid-2008, but
later fell by up 77 percent, battering investors who were
expecting further increases.
Since 2008, Pickens' net worth has grown by 25 percent to
30 percent, he said, and funds controlled by his BP Capital
management are also on the rise, after betting on commodities
like natural gas.
Benchmark U.S. natgas prices NGG0 have more than doubled
to $5.60 per million British thermal units since they fell to
seven-and-a-half-year lows near $2.40 per mmBtu in July.
Pickens now hopes that U.S. energy legislation will mandate
a major shift to natgas as a vehicle fuel, helping to wean the
United States off its dependence on foreign crude, including
around 5 million barrels a day from OPEC countries.
U.S. lawmakers introduced legislation in July that would
provide incentives for the use of vehicles fueled by natural
gas. The bill, which Pickens supports, could be passed with
climate or energy legislation this year..
"I think that legislation will pass before Memorial Day
(May 31)," he predicted.
Pickens said rising demand for gas should nearly double the
commodity's price to around $10 per mmBtu by 2013, but ample
supply of unconventional, U.S. shale gas could limit any natgas
rise this year, to around $6.50 per mmBtu.
BETTING ON MORE BUYOUTS
That may also bolster Pickens' recent equity investments.
A legendary corporate raider in the 1980s, Pickens said
he's positioning his funds to benefit from more potential
mergers and acquisitions in the U.S. oil and gas sector, after
ExxonMobil (XOM.N) said in December it planned to buy XTO
Energy XTO.N, a U.S. gas driller, in a deal worth $41
"Exxon and XTO, I love the deal," Pickens said. "I think
you are going to see activity that is similar to Exxon-XTO."
Pickens' BP Capital's top holdings in its latest SEC filing
included Devon Energy (DVN.N) and Chesapeake Energy (CHK.N),
two U.S. companies which, like XTO XTO.N, have large roles in
U.S. shale gas production, as well as deepwater driller
Transocean (RIG.N), and large independent U.S. oil and gas
companies Hess (HES.N) and Occidental Petroleum (OXY.N).
"All of them that are heavily endowed in the (gas) shale
play are going to be looked at by the majors," he said.
The United States is estimated to have some 2,000 trillion
cubic feet of technically recoverable natural gas reserves, or
enough gas at current production rates to supply the country
for more than 90 years.
"I'm long natural gas, not in 2010, but out beyond 2010,"
he said. "As economic recovery occurs, demand will go up for
natural gas. It is going to happen, it is just going to take a
little while to get there."
But the Texas investor has scaled back earlier plans to
make huge investments in wind farms for power generation, such
as a $10 billion plant he planned to build in the Texas
Panhandle. Pickens said he may revisit the investment when more
transmission lines are built in Texas. He is planning to build
much smaller wind plants in Canada and Minnesota, starting in
(Reporting by Joshua Schneyer, Edward McAllister; additional
reporting by Rhonda Schaffler; editing by Leslie Gevirtz)