Fieldwood Energy today is the largest E&P operating on the Gulf of Mexico shelf. A year ago it was three guys and an idea—and not even with a Gulf focus.

“Six months ago I didn't know what Fieldwood was going to look like, and I have no idea what it is going to look like in five years,” says Fieldwood founder and chief executive Matt McCarroll. “I don't think you can plan the future; you can only plan to execute the assets you own.”

After selling his previous Gulf of Mexico venture, Dynamic Offshore Resources, to SandRidge Energy in 2012 for $1.3 billion, McCarroll remained subject to a noncompete agreement in the Gulf at the time of Fieldwood's formation. Backed by New York private-equity sponsor Riverstone, as was Dynamic, McCarroll secured a $625-million commitment in early 2013 and went shopping for assets elsewhere. “We couldn't start Fieldwood with a 'let's go buy Gulf of Mexico' strategy,” he says.

Yet serendipity brought McCarroll and his former Dynamic team full circle, in more ways than one. By summer the noncompete had expired, and with any acquisition efforts unrequited, his powder horn remained full. Then along came Apache with an unexpected shift in strategy, followed shortly by a thanks-but-no-thanks, opened-item return from SandRidge.

Call it preparation meets opportunity, but the second-half 2013 power shift on the Gulf of Mexico shelf is staggering.

“We didn't think we would have the opportunities that have presented themselves, to buy the largest asset base on the shelf, and three months later buy the fifth-largest producer on the shelf,” McCarroll says.

For 30 years Apache Corp. had built its shelf position, largely from majors casting off assets whose growth profiles had leveled, to exceed all others. Of late, the company used these producing assets as a cash machine to fund growth in the onshore US and abroad, reinvesting only enough money into the shallow Gulf to maintain the production profile. But with investors harping on better returns, Apache bid farewell to the shelf.

Fieldwood was at the right place at the right time. Although it had neither assets nor revenue, it did have an experienced management team and a pocketful of Riverstone capital. McCarroll jumped at the 500-plus fields and, for $3.75 billion, immediately went from nothing to the pinnacle, leapfrogging the likes of Chevron, Energy XXI, W&T Offshore, Stone Energy and EPL.

Ironically, just three months later, SandRidge initiated a process to dump the shelf assets it had acquired from McCarroll two years prior, as new management deemed the position noncore. During its ownership window, capex, production and reserves had all trended down. Fieldwood was all too happy to reclaim them at a $500-million discount to the Dynamic sale price, which McCarroll attributes to the interim reserves drawdown.

“Buyers and sellers have different views on value,” he says. “It was a win-win. They wanted to sell, and we had the capital to act quickly. There was no emotional value in our bid.”

Fieldwood is moving into the shallow water where others have exited. Yet financial-backer Riverstone and McCarroll's management team have some $1.5 billion woven into the venture, illustrating the value they believe is at hand.

And that value is not in nursing tired, mature shelf assets into retirement. In response to a comment that 70% of proved reserves of the acquired assets are developed, McCarroll quickly counters that—like the unconventional revolution onshore—technology is unlocking new reserves offshore.

“We definitely see exploration potential in areas that were overlooked, that are now prospective primarily due to new seismic acquisition techniques.”

Fieldwood took over as operator from Apache of the Main Pass wide azimuth survey, a joint venture with Energy XXI, and drilled three wells below 22,000 feet with “really good results. We've got an active exploration program on those assets,” McCarroll says. Apache retained a 50% interest in deep rights.

Via SandRidge, Fieldwood is to be reunited with its Bullwinkle near-deepwater field, which has produced more than 200 million barrels of oil over 25 years. “We're drilling new wells and have exploration targets there as well,” he says.

Further acquisitions are opportunistic, not budgeted, as that would result in forced bad deals, per McCarroll. Fieldwood now has $400 million in cash and revolver available, and more once the SandRidge deal closes. Plus, all the cash flow Apache and Sand - Ridge once used as ATMs will now be reinvested locally. “We're 100% focused now. The Gulf of Mexico is a growth area for us.”