While Mayo Clinic has a reputation as one of the top hospitals in the U.S., it's less known as the majority owner of a flourishing oil and gas company in Texas.

Mayo Clinic has been in the oil business for about 20 years. In that time, oil and gas production has made Mayo more $190 million in cumulative royalty income.

Mayo Clinic became an oil tycoon in 1997 because not all gifts the health giant receives are monetary.

Barbara Woodward Lips, a familiar name on Mayo Clinic's campus, left the clinic $147 million when she died in 1997. It stands as the largest single donation to the clinic to date and plunged Mayo deep into the oil business. Lips had many oil properties in the Texas panhandle, including about 35,000 acres of land.

"Mayo Clinic has a large and highly diversified investment program that helps support our research and educational activities. Part of Mayo's investments includes equity interest in Latigo Petroleum LLC, an oil and gas company formed by Mayo and other investors in 2013 that owns and operates oil and gas wells in Roberts and Ochiltree counties in the Texas panhandle," stated Mayo Clinic Spokeswoman Susan Barber Lindquist.

Newsletter signup for email alerts

She added, "We formed Latigo to further develop oil and gas mineral interests donated to Mayo in the 1990s by Barbara Woodward Lips. … Latigo's oil and gas development activities will enhance the future mineral interest royalties that flow to Mayo in addition to generating a minor amount of operating income."

Latigo is based in Odessa, Texas.

In recent years, revenue from those oil- and gas-producing activities have bounced up and down wildly.

In 2016, Mayo made $11 million from its oil company. It made $14 million in 2015 and $23.8 million in 2014. In 2013, the year Mayo Clinic says it became majority owner of Latigo Petroleum LLC, it made $700,000 from oil production.

"Fluctuations in oil and gas prices materially affected the minor amounts of operating revenue derived from Latigo in 2016," Lindquist said.

Latigo is led by longtime Texas oil man D. Kirk Edwards, who previously managed Mayo Clinic's oil assets before becoming president and CEO of Latigo. In 2015, Edwards received the Entrepreneur of the Year award from the Odessa, Texas, Chamber of Commerce.

According to local media, Edwards told the chamber audience that he sold his oil conglomerate of Las Colinas Energy Partners with more than 9,000 wells so he could work for Mayo Clinic full time.

"Latigo had grown so big, so fast with the drilling we were doing that it was time to concentrate on that part of my business," Edwards said.

He added that Latigo developed an estimated $50 million worth of oil wells in 2014, though it slowed down after prices dropped below $50 per barrel.

"Like everyone else, we are just sitting back right now, waiting to see what oil prices are going to do and what service prices are going to do before we tippy-toe back into the waters of drilling wells," Edwards said in 2015.

In another article, Edwards said Latigo is prepared to hit the accelerator when oil prices rise to $55 per barrel.

"We are looking to buy properties, and we are looking to start drilling immediately, if we hit our number," he said.

While Edwards is the top executive at Latigo, Rochester-based Mayo Clinic Assistant Treasurer Ricky J. Haeflinger serves as a director and and vice president of the oil company. He has worked with the firm since 2013. Haeflinger has worked at Mayo Clinic for more than 20 years.

Haeflinger's expertise in the oil business has gotten him involved in other similar companies. He has served as an independent director at Black Stone Minerals LP, a longtime Houston, Texas-based oil and natural gas company, since January 2013.

He has shared voting and investment power over an aggregate of 3 million common units and 3.9 million subordinated units of Black Stone owned by Mayo Clinic and Mayo Clinic Master Retirement Trust. As a director, Haeflinger makes $380,000 per year from Black Stone and all of that payment goes to Mayo Clinic.

As an owner of a major oil-producing company, Mayo Clinic has been involved in lawsuits involving mineral rights, oil leases and other related issues.

In 2010, Mayo Clinic sued subsidiaries of the oil giant BP PLC for not properly paying the clinic for oil and gas royalties on oil and gas leases in Roberts County, Texas, dating back to the 1970s on land that later came under Mayo Clinic control.

Mayo Clinic and Latigo have been embroiled in another ongoing legal dispute with Perryton, Texas-based Courson Oil & Gas Inc. regarding oil and gas leases. A summary judgment by a district court in 2015 ruled in favor of Courson over Mayo Clinic.

Mayo Clinic appealed that decision, and that appeal failed in 2016. In January of this year, Mayo Clinic filed an appeal on the Courson ruling with the Supreme Court of the state of Texas.