DALLAS—The story behind Cantera Energy LLC is one that has some people wondering what its secret to success is.

The company formed in late 2012 with a $100 million equity investment from Kayne Anderson Energy Funds. At the time, the company only had four people on staff and no assets.

Fast forward to the present day. Cantera is operating more than 750 producing wells in South Texas with 50 employees and an investment value of more than $300 million.

John Kelly, president and CEO of Cantera, squashed any such theories of having a secret to success during Hart Energy’s A&D Strategies and Opportunities workshop on Sept. 3. He insisted that the key to the company’s quick turnaround is finding an appropriate asset to acquire and backing that up with hard work.

“The real trick is finding how to value an asset more than the next guy, knowing that you still need to make money for a decent return to your investors,” Kelly said.

Cantera found its perfect-fitting asset in July 2013 through a deal with EP Energy Corp. (NYSE: EPE) for 75,000 net acres in South Texas. The journey to that winning acquisition wasn’t an easy one, he said.

The company screened more than 50 deals between late 2012 and early 2013. It conducted evaluations on 21 properties, submitted nine offers totaling $750 million and lost every one of them.

“Someone said once you have to kiss a whole lot of frogs until you find that princess,” he said. “That’s kind of the approach we had—don’t be discouraged, maintain focus and continue evaluations.”

Having a strong conviction in a strategy helped push the Cantera team forward during this process, he said.

Eventually the team’s interest was sparked after receiving a teaser from RBC Richardson Barr about a South Texas package for sale by EP Energy.

“A few of us at Cantera had worked for El Paso in the past and had some knowledge of these properties in South Texas that Richardson Barr was marketing,” he said. “Having that knowledge was good and bad.”

It was good, he said, because the Cantera team had a good sense of how EP Energy operated. On the flip side, the team knew how aggressive EP Energy’s drilling program could be. Regardless, the company decided it was an opportunity to further look into, and afterward, found several reasons the package was the correct fit.

EP’s South Texas assets were onshore and had established production, development and exploration. It also was well-suited for the regional geology and location of the company’s strategic plan because much of the team had experience in the South Texas region.

“We decided it was absolutely the transaction we were looking for,” he said. “It met all our strategic objectives so we started moving forward with the process.”

While preparing for the auction process, Kelly said he recommends knowing as much information as possible about the asset before going into the data rooms. He also encourages everyone to be active listeners while inside the data rooms.

“Think about how what they’re saying will impact your evaluation,” he said. “It will give you a head start as you go forward.”

Cantera handled the evaluation process thoroughly in what Kelly refers to as a "bottom’s up approach." The approach, Kelly said, gave the company a much better answer for evaluations.

For the EP Energy bid, the company compiled a large amount of geophysical data, almost going well by well, to identify new producing zones, he said.

Ultimately, the goal is to be more competitive. Knowing what the seller wants will help out with that, he said.

In the end, Cantera’s bid for EP Energy’s package was chosen, and the company closed the purchase and sale agreement within one week.

“It was a great day for the company,” he said. “We had a transaction closed. A lot of hard work went into it, but the fun was just beginning because now we had something we had to start making money on.”