White says he profited from troubled oil company
Democratic candidate for governor Bill White, in his first public acknowledgment, has confirmed that he has made a profit from his investment in an oil exploration company he founded that ran into financial trouble after a Central Asian republic demanded more money.
In a story in Sunday’s edition of The Dallas Morning News, the former Houston mayor confirmed that he has made $1.7 million in capital gains and $1.1 million in net profit from the sale of more than 1.4 million shares of Houstonbased Frontera Resources over a four-year period beginning in 2006. He still owns almost 96,000 shares but resigned his chairmanship in 2001.
During his 2003 mayoral run, he told the Houston Chronicle that he hadn’t “made a penny” on his investment in the company he founded in 1996.
“I have some stock, but it is so subordinated to the other interests that I am told that it has little or no economic value,” he said.
Frontera focused its early activities on developing fields in the former Soviet republics of Azerbaijan and Georgia, oilrich lands where White had cultivated contacts while in the Clinton administration. The company operated under production-sharing agreements with the two republics.
However, the Azerbaijani fields produced quickly, and that nation’s government demanded a bigger cut of the revenue. That siphoned off a lot of Frontera’s revenue, forcing the company into temporary default on a $60 million loan and leading it to sell assets to pay off the loan.
White told the Morning News in late June that he thought he hadn’t profited “very much” from the investment “because there were a lot of expenses.”
However, federal tax returns released by White on June 8 revealed the profits from the stock sales. The newspaper reports Frontera was able to float a public stock offering in 2005, which allowed White to sell his shares at an average price of more than $1 per share. The shares are worth 6 cents each now, the newspaper reported.