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Unlike many shale CEOs, Van’t Hof grew up far from the oil fields of Texas and surrounding states. As a kid in Newport Beach, California, he seemed destined instead for the grass courts of Wimbledon.
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Van’t Hof’s Dutch-American father, Robert, was a tennis coach and former pro once ranked as high as 25th in the world. Kaes followed his father into the sport at age 3. By 14, he was the top-ranked junior player in Southern California, practicing or competing three hours a day for four days during the week and all day on weekends.
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After playing on the tennis team at the University of Southern California, Van’t Hof put his abilities to the test on the pro circuit. But that only lasted for a couple of years.
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“It’s such a thankless sport at the lower levels,” Van’t Hof said. “I was 600 in the world in singles, 150 in the world in doubles and I made $38,000 and had to pay for all my own expenses, all travel.”
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Van’t Hof’s cash-strapped tennis days, though, ultimately led him to a career in finance. Rather than pay for a hotel in New York while playing in the US Open in 2009, Van’t Hof stayed with a friend whose father was Ned Kelly, then the chief financial officer at Citigroup Inc. By the following year, Van’t Hof was among the new crop of investment-banking interns at Citi.
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Not long after, Van’t Hof found himself at private equity firm Wexford Capital in Greenwich, Connecticut, looking on as his boss scribbled on a white board. Steve West, then a partner at Wexford, was explaining to the 26-year-old analyst how an oil well works.
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West wanted Van’t Hof to build a financial model for a small oil producer called Windsor Permian in advance of its IPO. When the company started trading in 2012, it would be renamed Diamondback Energy.
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“He was really green to the oil business,” Denzil West (no relation to Steve), who was a founder and board member for a gas pipeline and processing company in which Wexford bought a stake, said of Van’t Hof. “But you could tell he was just uber-smart, and that’s where we became friends and worked together.”
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Diamondback didn’t have a place for Van’t Hof full-time after the share sale, so Wexford tapped him to be CEO of its new oil-field services company, Bison Drilling and Field Services LLC. Van’t Hof was reluctant to give up his newfound East Coast lifestyle, though. So for five years, he commuted between New York City and Midland, where the shale boom was just beginning to accelerate and the paltry dining options included a locally owned Tex-Mex restaurant and an Outback Steakhouse, usually half-empty.
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Van’t Hof found the Bison business tough sledding. While more and more producers were drilling horizontally through layers of shale to extract oil, Bison was set up to do mostly vertical drilling.
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By early 2016, Van’t Hof was ready to walk away from it all. He contemplated going back home to California and joining his buddies selling real estate.
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That’s when Travis Stice, Diamondback’s then-CEO, stepped in. Stice had a goal to more than triple the company’s market capitalization to $10 billion by the end of the year, and he wanted Van’t Hof to join as Diamondback’s vice president of strategy and corporate development.
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“I’m like, ‘This guy’s crazy,’” Van’t Hof said in an interview last month at the Petroleum Club of Midland. “That’s when he offered me a job. I went from leaving Midland to moving here full time.”
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Diamondback didn’t quite meet Stice’s 2016 goal, but it came close: Its market capitalization reached $9.3 billion toward the end of that year. Today, the company is valued at more than $50 billion. Midland expanded alongside it, its population surging in the past decade as the Permian transformed into America’s most prolific shale play. The city’s restaurants now number in the hundreds.
English (US)