Nearly broke, Sellers and Campbell relied on bank loans, and help from friends and family, to get started.
Unlike larger competitors, who outsource the search for lease rights to local agents, the two men searched land registers themselves for mineral deeds, then followed up personally with the landowners, usually small farmers in Texas and Louisiana.
They often sealed deals for lease options on 200 or 500 acres at a time with handshakes outside the local grain elevator. The goal was to sell groups of leases to drillers such as Chesapeake Energy and Devon Energy.
In the early days, they worked out of an old Texaco field office in rural Texas. Bugs crawled the walls. The two men, still in their twenties, shot cans out back for fun.
"Every deal was critical," Sellers said in an interview at Double Eagle's more upmarket current headquarters in Fort Worth. "If they didn't sell, we were done."
During a particularly cash-strapped moment, they bought one landowner a round-trip, first-class ticket to London — spending $9,800 on a credit card with a $10,000 limit — as a form of payment to extend their lease option on his land. The lease on that land was eventually sold, to Endeavor Energy Resources, one day in January 2009 — an hour before the option expired — in a hotel lobby in Tyler, Texas.
The landowner wept when he got a check for $5.5 million for his mineral rights. Sellers and Campbell made enough to pay off their debts and went on to secure more than ten thousand leases covering more than a million acres, selling them off in bundles.
By 2012, with the price of oil at about $100 per barrel, Double Eagle's success caught the ear of Wall Street. Greg Beard, Head of Natural Resources at private equity firm Apollo Global Management, recalled thinking after he first met them in Ft. Worth: "We have to work with these guys."
Apollo invested, and less than two years later, in November 2014, Sellers and Campbell sold one of their many business entities, Double Eagle Energy Oklahoma, for $251 million to Aubrey McClendon's American Energy Partners. Apollo reaped a four-fold return from its early investment on acreage in the Oklahoma formation known as the SCOOP, which is now crowded with drillers.
The sale couldn't have come at a better time. The price of oil had already peaked and was heading toward a 12-year low of about $28 per barrel.
Apollo's investment in Double Eagle represents a new tack by private equity firms — backing modern wildcatters to gradually build portfolios of mineral rights.
The move comes after some spectacular failures in traditional leveraged buyouts of energy companies. KKR's $7.2 billion acquisition of Samson Resources, for instance, ended in bankruptcy last year when shale drilling became more expensive than the debt-laden company could handle. Apollo's EP Energy, also purchased in a leveraged buyout, has lost four-fifths of its stock value in the oil market rout since the exploration and production company went public in January 2014 at a valuation of more than $5 billion.
Sellers and Campbell sensed opportunity as the price headed south. They focused on the Midland Basin, a rocky area of the Permian basin where technological advances had made it profitable to drill even with prices at $35 a barrel.