Slightly more than a year after Luxe Energy LLC entered the Delaware Basin, the company slipped out with a handsome payday and an undercurrent of wistfulness.

“We wanted to be bigger,” Lance Langford, Luxe’s CEO and president, told Hart Energy. “It wasn’t our original plan to leave, but for us to have grown we would have had to go public and use public capital to compete with other public companies to grow in the Delaware Basin.”

Instead, on July 13, Diamondback Energy Inc. (NASDAQ: FANG) said it purchased Luxe’s 19,180 net acres for $560 million, or roughly $27,000 per acre. Luxe’s Delaware Basin acreage sold with one of the highest publically disclosed prices yet.

Luxe bought its acreage in clumps in the Delaware around the time Concho Resources (NYSE: CXO) acquired acreage there at prices ranging from $13,600 to $18,000 per acre. Acreage in the basin has averaged roughly $10,000 to $20,000 per acre in recent months.

For small, private companies such as Luxe, the double-edged sword of success is the expense required to develop it to the next level. An IPO was possible, Langford said, but it seemed like a risky course of action.

“If we’re not able to grow, we’ve got 20,000 acres of Delaware, which is great but it’s not enough to justify having an entire public entity together,” he said.

Langford and Luxe co-founder Jeff Larson have worked more than two decades together and helped Brigham Exploration Co., and later Statoil ASA (NYSE: STO), explore the Williston Basin.

“We built it up to this great organization that just killed it in the Bakken,” Langford said.

But since he was 15, Langford wanted to run his own company. He chose to form Luxe, named after a company founded by his father, a college president-turned-wildcatter.

Langford, Larson and his team went shopping in basins across the U.S., concentrating on oil. It was in the Southern Delaware they spied what looked like substandard acreage—weak well results in a tier three or tier four area.

Langford’s team went in, looked at the production data and began to puzzle out what makes a great completion. Then the company delved into production data, looking at outlier wells on the high and low side.

“On the high side, the wells are outperforming, which helps lead you to what is the best kind of completion,” Langford said. “And then you look on the low side and it helps you identify poor completions and also poor operators.”

After assembling a database, Luxe found an area where results were pretty poor, he said. “But if you looked at it, it was tier three, tier four completions. That’s exactly what you would have expected of performance out of such a poor completion,” Langford said.

Luxe recognized the acreage as a tier one area that had undergone poor completions.

We found the diamond in the rough by looking at what other people were doing out there,” Langford said.

Like other public equity teams, Luxe used multiple transactions to put together an attractive position.

“When you put it all together they look great,” he said. “But when you break them all out separately, it doesn’t look all that good, not as contiguous.”

Langford said the company completed two large transactions and then many small transactions to put together a “world class position.” Initially, that included 18,000 net acres with 1,000 barrels of oil equivalent per day (boe/d) production.

All the while, E&Ps continued to drill the area, upping completion techniques until the Delaware became a tier one area.

At the time, Diamondback and similar companies were also focused on the Midland Basin because the drilling was cheaper and the results were better.

“They were just down further on the learning curve,” Langford said. “What’s happened also over the last year and a half is our understanding of how to better drill in the Delaware.”

Along with drilling efficiencies and cost drops, completions evolved and production and EURs have gone up.

“Now Midland Basin guys are trying to get in,” he said.

However, with the company not growing to the size Luxe wanted it to be, Langford decided to test the waters with a few calls.

It started with a call to Diamondback CEO Travis Stice, whom Langford knew when Stice was a Burlington Resources engineer. He also called a few other companies, but Diamondback made the right offer.

Langford said he’s satisfied with how the sale turned out, though he believes the position he sold is worth more.

“If I was willing to stay here and manage 20,000 acres with our team, we’d do fine and grow volume,” he said. But growth was going to be tricky given the intense interest in the Delaware and competition with public capital.

Luxe is now ready to move on, but in a bigger fashion than he envisioned the Delaware would go.

“You’ll hear our names again. What it looks like and where it is exactly we don’t know yet,” Langford said. “There are five basins we’ve been studying for the last 14 months. We’ll focus on those.”

Darren Barbee can be reached at dbarbee@hartenergy.com.