Autry Stephens’ Permian Basin-focused Endeavor Energy Resources LP has plenty to work on these days. The founder and CEO’s privately held, Midland, Texas-based exploration and production (E&P) company has some 4,800 operated wells and HBP leasehold in the oily Permian Basin, loaded with Wolfcamp and other formations ripe for horizontal wells. Companywide production is 42,500 barrels of oil equivalent (boe) per day gross and 34,000 net. And, while a fifth of Endeavor’s 2,000-employee team works in the E&P unit, the company also operates an oilfield services unit--from water hauling and operating rigs to oil and gas gathering and marketing.

Stephens began his career in the summer of 1962 with Humble Oil & Refining Co. upon receiving his bachelor’s and master’s degrees in petroleum engineering from the University of Texas at Austin. After serving in the U.S. Army Corps of Engineers for two years in France and Germany, he was assigned by Humble in 1964 to its Monahans, Texas, office, southwest of Midland.

“Humble was active in drilling prolific, deep gas wells in the Delaware Basin at this time,” he said. “It was exciting to be a small part of developing such great, deep fields as Gomez, Coyanosa and Grey Ranch.”

From Humble, he joined the First National Bank of Midland as an appraisal engineer and, in 1979, he became an independent producer, beginning with one well--McClintic “B” 30 #2 in Midland County--that is still producing a small amount of oil from the Spraberry Trend.

Today, Endeavor holds 381,000 net acres over Wolfcamp in the Midland Basin in Martin, Midland, Howard, Glasscock, Irion, Reagan and Upton counties. In the Delaware Basin, it holds about 97,000 acres straddling the Texas-New Mexico border, and it has some nonproducing leasehold in the Marcellus and Utica plays in the Appalachian Basin.

The company recently signed a seven-year, drill-to-earn, farm-out agreement with Humble’s successor, ExxonMobil Corp. via its XTO Energy Inc. unit, involving 33,200 gross Endeavor acres, 32,100 net, for Wolfcamp in southern Midland County with an estimated potential for 400 horizontals.

Oil and Gas Investor visited recently with Stephens on how he came to be in the newest hot U.S. oil play.

Investor: Did you want, at times, to operate abroad?

Stephens: I probably did have a little wanderlust in the beginning; just the names of these countries--Saudi Arabia, Venezuela, Kazakhstan, Indonesia--sounded exotic and glamorous. The reality is that there are political risks associated with most foreign oil production, and it takes a lot more time and capital to get started in the international areas. So I was content to put down roots in Midland.

Investor: And now the world envies your position. How did you know to hang onto your Permian assets?

Stephens: Most of Endeavor’s production is in the Spraberry Trend area. I think a stigma has been associated with this field because of the low rate of return and long pay-out of drilling investment. It has been derisively referred to as the “world’s largest uneconomic oil field.”

For this reason, producing properties and drilling acreage were available to start-up companies such as Endeavor.

My experience has been that it is very difficult to predict the future in this business. Although some companies are very successful with a “drill and flip” approach, I have observed that companies that sell properties often regret that decision when technology or commodity prices change the playing field. This is why I have a basic “never sell” strategy.

Investor: Advice for industry newcomers?

Stephens: Tongue in cheek, I would quote J. Paul Getty: “Rise early, work hard and strike oil!” I would expand on that: Find work that you enjoy, be honest in your dealings, persevere through the ups and downs, and be prepared to grow personally and technologically throughout your career.

Investor: How did you choose oil and gas for a career?

Stephens: I was raised on the farm, but I wasn’t a very good farmer. As high school graduation loomed, my dad suggested, “Maybe you should find something other than farming to do.” I chose to study petroleum engineering; my goal at that time was to get a degree and work 30 years for a great company with a steady salary and nice retirement plan.

Investor: How comfortable were you with setting out on your own?

Stephens: It was fairly terrifying. I started out doing consulting engineering and had some consulting work lined up prior to giving up my paycheck. My engineering experience gave me some hope that I could sell my services and support my family, so I had a little bit of a fallback--a skill--to survive on.

Investor: Would you take Endeavor public?

Stephens: The public markets are a great source of capital, but my skill set does not seem well suited for the public domain. `There are a lot of associated legal and accounting costs, and dealing with Wall Street takes a lot of time away from the business of producing oil. I never say “never,” but we don’t have any plans for that right now.

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