Houston's J.P. Bryan is known for his museum-quality collection of Texana: rare artifacts such as rifles, swords, old books and papers documenting the Lone Star state's history. But the legendary E&P executive and former investment banker is also known for his deal-making acumen.

He is founder, chairman and chief executive officer of Torch Energy Advisors Inc., which since 1988 has managed more than $3 billion and 8,000 wells through a series of institutional partnerships and acquisitions. He is also CEO of Rescaca Exploitation Inc., traded on the London AIM market. Torch is Resaca's largest shareholder. Bryan is also the former chair of Gulf Canada, where he did several deals to grow that company from $650 million in size to $6.5 billion in the mid-1990s.

Bryan knows when to walk away too. In September 2009, Resaca announced plans to acquire Cano Petroleum Inc. for approximately $76 million, but that merger was canceled in July 2010.

"To me, the art of the deal is those things outside the financial parameters. I've always been intrigued with deal-making," Bryan told the Houston Energy Finance Group recently.

"We can look at the IRR number we are trying to achieve and the behind-pipe reserves and come up with a number. But If we just submit a number (for a bid), we probably have not provided a lot of art to the creative side of the purchase."

Bryan said it is wise to get away from looking at a deal only through its estimated internal rate of return. "Try to buy things that have a great ROI (return on investment), at least three times your investment."

He outlined several other tips on deal-making. First, he said, you must look at the environment a company needs to have for effective deal-making and not set up artificial barriers to success. "For example, your landman's ex-husband is from Oklahoma and is a rat, so you won't look at anything in Oklahoma. Don't ever let an experience, favorable or unfavorable, put you off a particular deal."

Second, don't take too much pride is being such a tough negotiator, for those people don't do many deals. Furthermore, if a very tough negotiator does do a deal, his colleague across the table is not likely to deal with him again.

"Third, always sit face-to-face with whoever is buying or selling. There's a real temptation today, with email and cell phones, not to. We have moved away from dealing eyeball-to-eyeball. In poker, you don't do that. You look at a player's face, the way he places his hands on the table, his body language. That can be essential information."

Bryan advised that a buyer always go to the field. "The worst deals I've made in my life was when I did not do it, without exception. Go out to the site and talk to the plant operator or the field pumper," he said.