The Permian Basin has launched multiple IPOs as horizontal drilling builds the value of its stacked pays. Likewise, a new crop of private-equity-funded exploration and production (E&P) companies are finding their way in the Permian Basin.

Mark Hiduke is managing partner of one such endeavor--PetroCore LLC, funded in May by Natural Gas Partners. The private-equity provider bestowed $100 million on Hiduke and his three partners--fellow Pioneer Natural Resources Co. alums Scott Lapierre and Colin O’Farrell and David Hall, a veteran of SM Energy Co. Hiduke is all of 27.

Hiduke, a native of Dallas, graduated from Southern Methodist University with a degree in finance and economics, later earning his MBA from the school’s Cox School of Business in 2014. During college, he interned with TD Securities as a financial analyst, splitting his time between offshore lending in Houston and oil sands investment banking in Calgary. After graduation he joined Howard Frazier Barker Elliott, a valuation and investment banking firm in Houston.

Six months later, Pioneer’s vice president of business development called with a job offer. Hiduke welcomed the opportunity to return to Dallas while getting in on the ground floor at Pioneer just as it forged its joint venture in the Eagle Ford with Reliance Industries for $1.2 billion.

Hiduke rose from financial analyst in business development to supervisor of acquisitions and divestitures (A&D) over his four-year stint with Pioneer. The company was returning to its roots and focusing on the two premier unconventional oil plays in Texas, the Eagle Ford Shale and Spraberry/Wolfcamp. Hiduke worked on development of the EFS Midstream affiliate, the May 2013 joint venture with Sinochem Petroleum USA for 40% of Pioneer’s interest in the Southern Wolfcamp, and the company’s Alaska divestiture, among other deals.

Recently, Investor visited with Hiduke about PetroCore’s strategy.

Investor: Any favorite deal from your days at Pioneer?

Hiduke: They were all interesting, but the horizontal Wolfcamp JV stands out. I was a member of the largest operator in the basin and watched as the play matured into the stacked pay potential that was shown in the JV dataroom. It allowed me to see how to structure a deal, how to look at a deal through the engineering and subsurface aspects, and how to estimate an emerging play’s potential with scarce well control.

Investor: How did PetroCore happen?

Hiduke: I became interested in the private-equity model through the advice and experience of one of my mentors. I began talking with Scott and Colin about work- ing together once NGP became interested. Our expertise is complementary, and we decided to put a concept together that plays off of our strengths. We knew we needed a veteran manager of operations and drilling and completions, and found him in David Hall, from SM Energy.

Scott was Tipro’s geoscientist of the year last year. He is an expert in integrating subsurface disciplines into actionable reservoir characterization. Colin is an expert in development and operational geology. Previously, he worked on a development island six miles off the North Slope planning and geosteering wells drilled 6,000 feet down, 6,000 feet out and 6,000 feet into target intervals as thin as 10 feet. His and David’s combined expertise are great for high-intensity operating environments.

Investor: How did you obtain backing?

Hiduke: I had met one of NGP’s managing directors at an industry event and stayed in contact. We had multiple meetings with the firm and they were excited about our concept and the opportunity set. NGP worked quickly plus they have industry-leading expertise and financial firepower.

Investor: What drives your strategy?

Hiduke: We are geoscience-driven and our target is unconventional oil. We will pursue what we know and know well but, that said, Scott and Colin have done work from a subsurface perspective across the Lower 48, Canada and Alaska. David has worked in horizontal development plays across Texas and Louisiana including the Haynesville, Cotton Valley and, most recently, the Spraberry/Wolfcamp. Generally, our plan is to use subsurface-driven ideology to pick up smaller contiguous positions and showcase what the resource can do. If you are in the core areas of the major basins, you don’t need much acreage to have resource scale. And if there are stacked pays, you need even less to create an attractive inventory of locations.

Investor: How do you land deals in a competitive marketplace?

Hiduke: Several basins have been defined by the drillbit where valuations are established and the only options are large, contiguous acreage packages. In others, the core or where it might move has yet to be defined. The opportunity set is in finding those assets before well control has set values. Additionally, the opportunity is to work with smaller, private independents that don’t want to operate horizontal wells but may want to participate.

Investor: Advice for those interested in this model?

Hiduke: Surround yourself with smart people who know a lot more about every aspect of the business than you do. Put your head down and learn for as long as possible, until the right opportunity presents itself.

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