Buffalo, New York, may not be the first energy headquarters city that comes to mind, but it’s been a successful launching pad for fast-growing U.S. Energy Development Corp. The private, family-owned business began as a large real estate firm with a small energy arm; today, it is just the opposite. In 2008, Jordan M. Jayson, vice president and son of the founder, returned to his hometown to participate in developing the financial structure that will take the E&P to the next level.

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Jayson played lacrosse for Johns Hopkins, a stronghold for the sport, while earning his degree in sociology. After graduation he joined German investment bank Arnhold S. Bleichroeder. Next came portfolio management and trading stints with hedge fund SAC Capital in Connecticut and later, across the pond in London.

In 2008, as the global economic meltdown intensified, Jayson talked with his parents about joining U.S. Energy. He spent the first year learning the ropes: well tending, operations, accounting, sales and marketing, and finally, business development and corporate finance, which has remained his niche.

The company has expanded rapidly over the past three to four years, and its capex budget for 2013 is $250 million, up from $75 million in 2009. From its roots in shallow oil and natural gas drilling in the Appalachian Basin, where it has some 100,000 acres held by production, it has expanded into the Permian Basin, the Anadarko Basin, the Fort Worth Basin and the Gulf Coast, among others. It also has substantial nonoperated interests in the Williston Basin.

In a recent interview, Jayson discussed the company’s strategy, which he expects to include an international foray within the next year.

Investor How did U.S. Energy expand out of the Appalachian Basin?

Jayson We started taking nonoperated interests and buying into the Gulf Coast in the early 1990s. Traditionally, we were about 85% operated vs. nonoperated, but with the growth of the shale plays and joint ventures, we’re now balanced about 50%-50%. We recognize there are great opportunities with partners to take advantage of their skill sets and allow them to leverage off of ours.

Investor How would you describe your overall business strategy?

Jayson To be opportunistic, and to stay financially healthy so we can move quickly. My father structured the company so it’s easy to move quality projects up the ladder quickly and make decisions.

When assets start to roll out after the big land grabs, we come in with a structured and detailed development plan. That makes us more attractive for joint ventures and farmouts. We like to get the bit in the ground within six months.

Investor You’ve rebalanced between oil and natural gas.

Jayson Yes. Today our production is about 85% oil, 15% gas. Five years ago, just 15% of our assets were oil-based. Likewise, 85% of our capex in 2013 will fund horizontal drilling. We’ll drill about 50 wells as operator and take part in an additional 50 to 100.

Investor What are your drilling targets?

Jayson We’ll continue with some drilling in Appalachia and expand our operations in Oklahoma and Texas, exploiting the various pays in the Anadarko, Permian and Fort Worth basins. We’ve developed about a third of those prospects on our own. Our capex will be divided about 25% each among Oklahoma, the Barnett, the Permian, and elsewhere.

Investor What financial structures are you considering?

Jayson We’re looking at an MLP structure, an IPO and other options.

Investor How are you funded?

Jayson It’s a combination of bank financing, institutions, and structured finance. Some of the partnerships and JVs we’ve formed began 15 to 20 years ago. As they’ve grown, we’ve grown, and we’ve taken on bigger projects hand in hand. It gives us diversification and the ability to leverage when we get into a hot play, or when a play is underperforming, to move quickly to a different basin.

Investor Do your parents still work every day?

Jayson Yes. It’s their passion, and they still put in eight to 10 hours every day. My mom works in sales and marketing. They lead by example and by their work ethic.

Investor Among current trends, what are you watching most closely?

Jayson The most interesting development I’ve seen over the past four to five years is the massive influx of private equity, institutional money and mezzanine-structured finance players into the energy space. It makes me a bit wary. When I look at the capex projected to be spent—$500 billion in the E&P space next year, with $400 billion of that international or offshore and $100 billion to North America—I think North America might be getting a little bit crowded. Prices for PDPs and PUDs have been pushed up. There might be better opportunities internationally and offshore. We’re spending a lot of time exploring that right now.

Investor What do you like best about the industry?

Jayson The passion of the people in the industry. Working with my parents has been incredible. We have the feeling of a family company, but we’re competing with some of the largest companies in North America. We’ve been around for 30 years, and I came home to help make sure we’re around for at least another 30.