"Never be afraid to do a deal in a changing environment," says Bobby Lyle Jr., president and chief executive of Lyco Holdings Inc., a Dallas company that is in oil and gas, real estate, banking and other endeavors. "Timing is everything. But always be prepared to adjust your deal."

Lyle shared stories of the many transactions he has made in the past 25 years, and how he financed them, during a presentation on oil and gas investing for institutions at the Southern Methodist University's Cox School of Business in Dallas recently. Lyle is an alum and significant donor to the school.

Lyle has used timing along the way, ever since he started his oil and gas company in 1981 with a $1-million loan. By developing trusted relationships with bankers and institutional investors such as Minnesota Mutual Life Insurance and Prudential Insurance, he has been able to bankroll numerous projects.

One of his first big deals was to buy the oil and gas assets being divested by Bethlehem Steel in June 1983. He heard on the radio that the steel company had just suffered its worst quarterly loss ever, so he called them to find out if they had any oil and gas assets, and if they would like to sell them. One lesson learned: "Know your market and don't be afraid to make that call-you never know where your next deal is coming from."

This deal took many twists and turns, including a sudden phone call from the seller demanding that the deal close in two weeks or it was over.

"I told them I had not secured the money yet and I was still doing the title due diligence," Lyle said. As luck would have it, Interfirst Bank of Dallas knew some of the parties involved and agreed to loan $40 million, although as Lyle said, "I had no balance sheet to back that up at the time. After the deal closed, we went to institutions to get permanent funding."

Later in the late 1990s, Lyco Oil & Gas Co. discovered the way to unlock a major oil play in the Williston Basin, shooting the first 3-D survey in Divide County, North Dakota. Lyco developed it and then sold it to Calgary-based royalty trust Enerplus Resources Fund (NYSE: ERF) for $421 million in 2005.

"Technology and science are so important, but in this business, the true art form is in knowing when to sell." Lyle often did handshake deals with capital providers as trust grew, and there was a lot of repeat business.

Lyco was one of the first E&P companies to use vendor financing in the mid-1980s when times were tough. At the time, he was drilling in Colorado's Wattenberg Field, "a resource play before we used the term." He approached Duke Energy Field Services, his gas gatherer, for help.

"Duke had never been in the financing business, but we convinced them that if they helped us keep drilling, that would add some Hamburger Helper to their income statement as well."

From this experience, Lyle learned you always have to look for new ways to connect the dots when you go into a field. "Don't wait on a deal-go find partners before that, or if you are an institution, find a good operator and advance the capital first. Always look beyond the balance sheet at the assets underneath before you say 'yes' or 'no.'

"Having part of a good deal is better than having all of nothing."

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