At Hart Energy’s recent Energy Capital Conference in Houston, exploration and production (E&P) and finance executives talked capital structure, company building and exit. Protégé Energy III’s chairman and CEO Martin Thalken started his presentation with a sketch of his early life—a contrast to the sophisticated financial and technical world he inhabits with his company, a private-equity-funded E&P in the Utica/Point Pleasant play.

A native of western Nebraska, Thalken was the youngest of six boys. His father was a “toot the horn” engineer for Union Pacific Railroad Co. and his mother worked for Southwestern Bell. A typical Midwestern, blue-collar family, they lived paycheck to paycheck. “Imagine having to feed six growing boys,” he said. Today, three brothers work for the railroad and two have college degrees.

Thalken became a drilling and reservoir engineer, building a career at ExxonMobil Corp. (NYSE: XOM), Enron Corp., Vintage Petroleum Inc. and Newfield Exploration Co. (NYSE: NFX) At his 10-year high school reunion, a classmate asked where he worked. He replied, “I work at Exxon.” The classmate asked, “Oh, you pump gas?”

Third-iteration Protégé Energy III, based in Tulsa, Okla., was formed this past September with backing from EnCap Investments. Like its predecessors, III’s goal is to build assets in the core of one or two world-class U.S. resource plays. This time around, Protégé has $300 million in its coffers from EnCap and management.

Thalken’s group has a combined 160 years’ experience in multiple basins. They are a mix of gray hair and young talent, he said, including colleagues Thalken had known or worked with previously.

On the youth teams he has coached, Thalken, an admitted fan of statistics, stresses getting the easy baskets, playing defense, taking high-percentage shots and, in baseball, driving in runs. In energy, he focuses on cycling in assets, finding the best owner for those assets and providing superior returns.

The returns for Protégé I and II, Thalken’s earlier start-ups, obliged. The first took an acquire-and-exploit tack in the Midcontinent’s Granite Wash and Woodford Shale plays. It launched in 2004 with $30 million from EnCap and management, supplemented with a $50 million credit facility from Union Bank. After two major acquisitions, development and workovers, the company exited in 2008. The return on investment (ROI) was 2.4x and internal rate of return (IRR) was 40%.

Protégé Energy II’s path had more twists. EnCap and management provided $100 million for a similar strategy in the Midcontinent and East Texas. But the timing—2008 and 2009—was beyond tough. Deal flow was pitiful, Thalken said. “We had to change strategy and remake ourselves.”

Hearing news of the developing Marcellus play, in 2009 Protégé looked at leasehold in Pennsylvania’s Washington and Greene counties. But it couldn’t block acreage up. Fortune struck in the form of a Columbus, Ohio-based private E&P seeking a partner on its deeper rights. Protégé assembled a 21,000-acre contiguous lease position in eastern Ohio on the western edge of the developing liquids-rich Marcellus Shale play. “It became the most challenging and exciting project in my career,” Thalken said.

The list of unknowns was long: porosity, reservoir pressure, drilling and completion best practices. Committed to getting it right the first time, the Protégé team analyzed information on state websites and networked with other E&Ps. It studied azimuth, landing point, frack-stage spacing, amount of proppant, slickwater vs. gels fracks and much more. In the end, triumph. Its first Marcellus well tested at 6.9 million cubic feet equivalent per day (MMcfe/d) with 70% liquids. One of the best wells drilled in the southwest Marcellus, it extended the play into Ohio just as the Utica/Point Pleasant was being tested.

Next, Protégé drilled a vertical Utica science well. The gross pay registered as the team expected. It had the best porosity of any well Protégé had studied. And, the highest reservoir pressure.

“The results leaked out and the phone began to ring,” said Thalken. Protégé engaged Tudor Pickering Holt & Co. and Thompson & Knight LLP, selling to Statoil ASA (NYSE: STO) in 2012. This time around, the ROI was 2.7x. And, had Protégé not been saddled with Texas Panhandle assets that didn’t pan out, ROI would have hit 3.5x, Thalken said.

Back in the game this past September, with $300 million in hand, the team assembled a 17,000-acre leasehold in the Point Pleasant core. With a 2-D seismic survey underway and drilling set for later this year, Thalken “expects to test wells at rates equal to the best yet seen in the play.” Production is expected by mid-2015.

With capital allocated 70% to acquisitions and drilling and 30% to discretionary leasing, Protégé aims to establish production of more than 100 MMcfe/d, EBITDA of more than $100 million, and an asset base worth $1 million to $2 billion—a viable IPO candidate.

Pumping gas, and liquids, can pay off.