Rick Bobigian and his team at Houston-based Black Pool Energy LP were not only the smallest fish on a panel of producers in terms of amount of capital raised at the Private Capital for Energy Forum in Houston in June. The company is also a small fish in the pond in which it operates: the Gulf of Mexico.

With just $41 million in private equity from Huff Alternative Fund to deploy in the Gulf, one of the most expensive places to do business in the world, Bobigian has chosen a challenging focus area for the relatively small amount of equity that is backing his company.

"In December 2004, we knocked on a lot of doors, but there wasn't a lot of interest in investing in a company that was going to take the risks we were going to take," he said at the conference, which was sponsored by COSCO Capital Management and Oil and Gas Investor. "At the beginning of 2005, capital providers started getting interested in energy and some of the folks we visited called us back. Within 90 days we had our fund from Huff."

Once Bobigian secured equity capital, Black Pool immediately began drilling wells. "Our first two wells were dry holes, and enthusiasm from the board changed," he said. "But now, we've hit three out of six, and management is happier."

Bobigian said the calls he had to make to investors to inform them of the dry holes were not easy. "After the first one, they said, 'Was that your best one? Why did you drill that first?' We knew we had to drill our sure bet next.

"But it was the same process over again. Now there was just dead silence on the other end of the line. From then on, everything was tense. We had to have a post-mortem after we drilled our third well and it was successful. We explained to them why everything had happened and how we planned to move forward. So we drilled our fourth well, and it was a dry hole."

Black Pool currently owns 2,500 square miles of 3-D seismic covering an area from Galveston to Padre Island on the shelf offshore Texas. Of its six wells, it operates two, while Duncan Oil operates the third. The company has net daily production of 8.4 million cubic feet of gas and 11 barrels of condensate, with three more offshore prospects that are ready to drill.

Though his business plan is an unconventional one as far as private equity is concerned, Bobigian has a defined exit plan-by the first or second quarter of 2008-and a clear exit is always appealing to investors. Though he was turned down initially because of his unconventional strategy, he suggests sticking with your original plan.

"Build a plan you believe in and go out and knock on as many doors as you have to until you find someone else who believes in you too," he said.