It was a deal that ended an oil and gas dynasty in Texas: XTO Energy Inc.'s purchase of Dallas explorer Hunt Petroleum Corp. and other associated entities for $4.19 billion. It was also one of the best timed sales in the oil patch, happening at a time of record-setting oil and gas prices.

Hunt Petroleum was an 80-year-old company founded by the late oil tycoon Haroldson Lafayette Hunt Jr., known as H.L. According to "The Prize: The Epic Quest for Oil, Money & Power," by Daniel Yergin, when the Ku Klux Klan threatened to burn down Hunt's gambling hall in El Dorado, Ark., he switched to oil, buying the rights to wells in Arkansas in the early 1920s. But Hunt's "flying start" came when he bought leases for a prospect in East Texas from wildcatter Columbus "Dad" Joiner in 1930 for $1.3 million. It became one of the largest oil discoveries in the world. By 1948 Hunt was considered the world's richest man.

Like any family business that's passed through several generations, Hunt Petroleum had issues. It was 53% owned by the Margaret Hunt Trust Estate (H.L. Hunt's oldest daughter, Margaret Hunt Hill, died in 2007) and 47% owned by the Haroldson L. Hunt Jr. Trust Estate (H.L. Hunt's son, Hassie, died in 2005). After Margaret Hunt Hill died, one of her grandchildren, Albert Galatyn Hill III, sued family members, accusing them of conspiring to plunder the family trusts and defraud the Internal Revenue Service. The only family member still involved in the company, Hassie's cousin Tom Hunt, who served as chairman, was in his 80s, so the trustees needed to make some decisions about the fate of Hunt Petroleum.

In October 2007, Hunt Petroleum hired Goldman, Sachs & Co. to look at strategic alternatives, and in December, decided to sell. "The company was performing well and had a series of investment decisions to make, so there was a fundamental decision whether to push forward on those investments or consider other alternatives," says Michael Carr, a managing director at Goldman Sachs who handled the process.

At the beginning, it wasn't clear if the entire family and their related entities were going to participate in the sale, but after a month and a half, they agreed they would. The family also agreed that the company's real estate assets would be spun out before the close of the sale of the oil and gas assets.

The company owned assets in the Gulf of Mexico and along the Gulf Coast as well as in the North Sea. Not all these assets would be of interest to all buyers, so Goldman split the packages and ran three different processes.

"The biggest complication was separating everything and lining it up straight," says Robert Profusek, an attorney at Jones Day who counseled Hunt. "It was a lot more complicated than a public company being sold."

There was also no first- or second-round bidding, only best, final offers. "We wanted companies to come up with their best offer, otherwise it would have unnecessarily delayed the process without resulting in a higher price," says Brady Parish, Goldman Sachs managing director who also worked on the deal.

Despite very competitive bidding, Fort Worth-based XTO came out on top, and agreed to buy all of the assets in June 2008. "XTO is usually pretty decisive in this type of circumstance," says Martin McNamara, an attorney at Gibson, Dunn & Crutcher LLP who represented XTO in the deal. "That's been a hallmark for them."

XTO's bid was attractive. Not only was it a big company and a top operator that provided certainty about a close, it offered stock and cash, which would ease the family's tax burden and provide them upside but also allow them to cash out. XTO president Keith Hutton, meanwhile, called the deal a "super-charged bolt-on" for the company.

William Brewer, the attorney for great-grandson Albert Hill III, vowed to fight the sale, calling it "a bargain-basement steal" for XTO. "Why would anyone dump the company at this price in this market? Unbelievable," he said at the time. But Hill didn't sue. The deal's closing was announced on Sept. 3. Two months later, Tom Hunt died from leukemia. But he sold the company near the height of oil and gas prices. H.L. couldn't have timed it better.