The craving is gone

At 41 years old, the biggest mouth in the oil patch, and one of the biggest successes, is retiring. In 1998, Don Gray gathered up his retirement savings of $70,000 and co-founded a junior natural gas exploration company. Peyto Energy Trust is now worth more than $2 billion, and Gray has amassed a personal fortune of about $100 million. Gray has always cut his own path. He was ahead of the curve in making Peyto an income trust in 2003, and he didn't pull any punches when he called his competitors "mediocre." We talked with him recently in his mostly bare office.

Does it feel like you're giving up your baby?

Not at all. I've put my mark on this company, and I think it's in great hands. I learned early on in my career, when I was let go from one of the jobs I was at, that everyone is replaceable. And I certainly think I'm replaceable here.

Things are going pretty well. Why stop now?

I like business--the concept of making a return on the capital--but it's just business, to be honest. It's really not something I crave.

Still, it must be hard to leave.

I love Peyto and I'll certainly take lots of credit for getting it going, but I really like my own identity. Peyto doesn't define who I am. There's a feeling of relief, in a way, that I get to be just myself.

What's next? Another energy start-up?

I have no plans to do that. If I ever did, I'd be very surprised if it was public. I really do not know where I'll be a year from now, in terms of what I'll be doing.

Any regrets?

I really don't have any. Looking back, I could have handled some things differently, but there was a method to my madness. I don't mind having a certain segment of the industry supporting me and a certain segment saying "I don't like that guy."

You took some heat when you converted Peyto into an income trust in 2003, then spent a lot on exploration and development, rather than pay out all your cash to investors.

I had shareholders phone me to say that I screwed up the whole thing, that it was a huge mistake. They've never phoned me back to say, "I guess you were right." Since 2003, we've paid out almost as much money to our unitholders as we have raised in total equity in the history of the company. We started with a plan for the type of company we wanted to be, and we're still working that same plan.

Production growth has slowed and your unit price is down over the past year. What does that mean for Peyto?

It makes it harder for us to use equity. I think that that type of adversity--having to live within your means--will build a stronger company. Part of our success was that we had to start off with very little, and we had to make those dollars count. We're getting back to that by living within our means. I think the market will be very impressed a year, two years out.

What are your immediate plans?

Some travelling. No big destinations. My wife and I have three teenagers, and a little one going into kindergarten and one going into first grade. I'm excited about volunteering some time at the school. I'd love to be a mentor for other people.

Did you have a mentor?

When I went to Texas A&M, we had a fellow who came up to our university every Friday--a private oil-and-gas man. He taught us how to run our own company. That had more impact on Peyto than anything I learned working in the oil and gas sector in the 10 years before I started the company. The people I worked with, in a lot of cases, taught me what not to do.

I heard you've picked up golf.

I shot 88 one round, which was pretty spectacular for me. I know where I started from with my golf game, and if I could shoot in the 70s some day, I would love that. I set my targets extremely high. I'd love to win the club championship someday. I don't limit myself.