Terry Pegula at press conference announcing approval of his purchase of the Bills. Source: Buffalo Bills.

At a news conference in early October 2014, announcing his purchase of the NFL's Buffalo Bills from the estate of team founder Ralph Wilson, Terrence "Terry" Pegula said that if you'd told him a decade earlier that he'd be the owner of both the Bills and the NHL's Buffalo Sabres, "I'd have called you a liar." And if you look at the trajectory of his success, you'll understand why, only 10 years before, such a goal wasn't even close to being on his radar. 

Let's take a closer look at Terry Pegula, and how years of hard work and investment in American energy turned him into a billionaire five times over and one of the most beloved people in upstate New York. 

The American formula to overnight success 
Pegula's immense wealth -- which Forbes estimated at more than $4.5 billionin 2014 -- wasn't inherited from his family, as it the case with many of America's rich, but instead it was a product of years of hard work and focus, with more than a little bit of luck and timing. 

A Penn State graduate, Pegula put his petroleum engineering degree to work in the oil and natural gas business out of college, starting with Getty Oil in the early 1970s. After nearly a decade working for Getty and other companies, he set out on his own, starting East Resources in the early 1980s with less than $10,000, largely small investments by friends and family. 

Fast-forward more than 25 years, and Pegula's East Resources would be worth billions of dollars, because of its major natural gas holdings in the Marcellus Shale formation in Pennsylvania and neighboring states. In 2010, East Resources would sell $4.7 billion worth of assets to Royal Dutch Shell, and in 2014, it sold $1.75 billion in assets to privately held American Energy Partners, headed up by another American natural gas tycoon, Aubrey McClendon.

Pegula's windfall may have occurred seemingly overnight, but it took years for his East Resources to build up its valuable portfolio of natural gas assets, and the development of hydraulic fracturing, or fracking, along with horizontal drilling, to unlock those gas resources and make them financially viable to produce. 

It's also a touch ironic that fracking -- which is undoubtedly the key behind Pegula's worth and probably the only reason the Sabres and Bills are still in Buffalo -- is banned in the state of New York.

Upstate New York sports and entertainment mogul 
Pegula was born and raised in Pennsylvania and built much of East Resources on land in that area, but his company was based in Olean, in western New York. He would meet his wife, Kim, there, and it's her ties to Rochester and Buffalo, having grown up in that part of New York, that eventually led Pegula to buy Buffalo's NHL and NFL franchises and keep them in town. 

Kim Pegula is co-owner of the two sports franchises with her husband and plays an active role in both teams, as well as the huge mixed-use harborfront hockey and retail development, called the HarborCenter, where the Sabres play. 

The Pegulas have committed to keeping both franchises in Buffalo, and with Terry in his early 60s and Kim in her late 40s, it's likely that the Pegulas will keep that promise for decades to come. Whether any of their five kids (three together, two from Terry's first marriage) are interested in owning the franchises or keeping them in Buffalo is a question that shouldn't have to be answered for many years to come. 

The Pegulas also own a high-performance athletic training facility and company, as well as the anchor tenant restaurant at HarborCenter, and they hold a partial interest in music label Black River Entertainment. 

Philanthropy heavy on college athletics 
The Pegulas have donated more than $100 million to both Penn State (Terry's alma mater) and Houghton College (which Kim graduated from), specifically to build major sporting complexes. The Penn State donation was significant enough to build facilities and to allow both the women's and men's hockey programs to move up to Division 1, the highest level of competition in college athletics. 

While Houghton received a much smaller donation, the funds paid for a facility -- the Kerr-Pegula Athletic Complex --  that includes baseball and softball stadiums, and a fieldhouse featuring track, tennis cardio, weights, and locker facilities. 

Timing is everything 
It looks a lot like Pegula got out of the oil and gas business at the right time. Yes, East Resources still holds some small asset base, but since selling the vast majority of the remaining holdings in 2014, natural gas prices have plummeted by 30%. Going back to the 2010 sale to Shell, prices are down even more: 

Henry Hub Natural Gas Spot Price data by YCharts

Considering that the value of selling the gas trapped in its holdings is the primary driver of its value, Pegula's net worth would be significantly smaller today had he held those assets and stayed in the business. Looks like he may have picked a great time to become a sports mogul. 

Jason Hall has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.