There's no moss growing under Jon Brumley's feet. Among his passions—besides the oil and gas business—are advocating for U.S. education, ranching and sports. He has ridden on European bike tours and in the Hotter'N Hell 100 Texas bike race, and he loves to swim. He quit playing racquetball three years ago due to an Achilles tendon problem, yet he completed two sprint triathlons in 2010.

Brumley's also run a great race in the oil industry. Most recently, he was chairman of the general partner of Encore Energy Partners and chairman of Encore Acquisition Co. (EAC) since April 1998, when he started it with his son, Jonny. Encore was acquired in 2010 by Denbury Resources Inc. for $4.5 billion.

Prior to creating these companies, Brumley was briefly chairman and chief executive officer of Mesa Petroleum (T. Boone Pickens' E&P company) until it merged in August 1997 with Parker & Parsley to form Pioneer Natural Resources Co. He served as chairman of Pioneer for two years until leaving to form Encore.

Before that, he co-founded and chaired Cross Timbers Oil Co., which became XTO Energy Inc., and before that, was president and CEO of Southland Royalty Co., which became Burlington Resources Corp.

Brumley received a business degree from the University of Texas in 1961 and an MBA from the University of Pennsylvania's Wharton School of Business. He and his wife Rebecca, also a UT alum, donated $1 million to UT's Robert S. Strauss Center for International Security and Law to create the Jon Brumley Chair in Global Affairs. It funds programs that examine how to reconcile technological advances with security needs, particularly the world's struggle to use nuclear technology peacefully. The chair also supports examination of challenges created by fields such as genetics, telecommunications and nanotechnology.

The Brumleys met when they were appointed to the Texas State Board of Education as chair and vice chair from 1984 to 1988. There, they implemented "no pass-no play" rules and helped develop standardized tests every Texas child must take to graduate. Rebecca also runs a foundation that gives books to indigent children under the age of five and works with their parents to instill a love of reading.

Since the sale of the Encore entities, Brumley runs Bounty Investments and sits on the board of his son's new E&P, Enduro Resources.

Investor: You've been an executive with several of the biggest independents. How did you get started?

Brumley: After serving in the Army, I worked at Towers Perrin doing spreadsheets—this was long before computers! After a while I was looking for something else, and a UT fraternity brother's father, Gil Weaver, the chairman of Southland Royalty Co., offered me a job. I started doing economic modeling and assessing risk.

Later on, Mesa tried to acquire us (but we fought it) and through that I met Boone Pickens, who offered me a job. When I talked to Mr. Weaver about it, he made me president of Southland.

Investor: So from way back, you've been involved in M&A.

Brumley: I was lucky and in the right place at the right time. At one time Southland was one of the largest independents...and it became part of Burlington Resources through merger. Then we started Cross Timbers, which eventually became XTO.

Investor: What's your take on Exxon buying XTO?

Brumley: It's exciting. I haven't been at XTO for 16 years so I can't take any credit, but they did a great job. That's a powerful management group—Bob Simpson, Palko, Hutton, Vennerberg, Baldwin—a great team that came early and stayed late.

Investor: What's the new plan at Enduro?

Brumley: Jonny started it and he has taken the same business plan: he buys long-life, quality reserves, either gas or oil, whichever is the best opportunity at the time. They give you flexibility. Whatever he has acquired needs reasonably little cash flow to keep production flat, so he can use roughly half the cash flow to pay down debt. It worked at Southland, XTO and Encore. It's easier to say than it is to do.

The hedging policy has a lot to do with it, too. Jonny has a lot of understanding of hedging theories.

Investor: What is your hedging policy?

Brumley: To hedge one-third of production with puts, one-third with swaps and then leave the other third open. I feel puts are significant. This plan always leaves you two-thirds covered to the downside and two-thirds open to the upside.

Investor: What is your gas-price outlook?

Brumley: I think the gas price is going to stay in a narrow band for a while and that's good. It's going to build up a huge amount of demand and I think the utilities are going to have to come to gas in the next five years. I'm very positive about natural gas, but I think you need a five-year outlook.

When we started Encore oil was $12, and when we sold it, oil was $70 or $80. When we bought the Cedar Creek Anticline in North Dakota from Shell, oil was $12 and our three-year forecast was $20—and people thought we were aggressive. It was $20 by the time we closed and I can't say we saw that coming.

Investor: What is your secret?

Brumley: Buying quality, long-life production that I can live with forever, reengineering fields, drilling additional wells or implementing a waterflood or tertiary project. Always have top-flight engineers. And, I've always chosen great partners; that's most important.