Areas of Interest

Industry Observation

Successful entities will capitalize on current market distress and uniformly low valuations to acquire critical energy infrastructure assets (both midstream and downstream) as well as defensive energy services companies.   There will also be attractive opportunities to invest in upstream (exploration and production) companies, though this would be on a more opportunistic basis

Energy infrastructure companies and assets would include midstream and downstream assets, including:

  • Oil and gas gathering and long-haul transportation pipelines
  • Natural gas and liquid processing and treating plants and natural gas liquids fractionators (to separate ethane, propane, butane, etc.)
  • Terminal and storage assets
  • Export infrastructure across commodities (oil, natural gas, and LPGs)

Energy services assets would include:

  • Providers of essential services that rely on current production, not new exploration and drilling.Examples would include pipeline maintenance and inspection companies and production chemicals providers
  • New technology companies that enhance energy industry efficiency, including new flexible pipeline technologies, remote monitoring companies, and Artificial Intelligence software providers for oilfield and energy transport optimization

Focus will likely be on infrastructure and services providers to the best basins and markets

  • Oil:Focus will likely be primarily in the Permian basin, where companies can make money as low as $30/bbl long term
  • Natural gas:Focus will likely be in the Appalachian basin (both Marcellus and Utica formations), where companies can make money below $2/mmbtu natural gas prices

One potential execution strategy is to capitalize on the above opportunities by working with groups with a track record of success in the energy industry during distressed markets and turnaround situations.  Successful teams will have:

  • Very strong relationship networks with operating company CEOs and management teams, investment bankers, equity and credit funds, and industry experts (technical and operational)
  • Flexibility and creativity to acquire companies either through the equity, debt, or other structures
  • Discipline to acquire companies only at low valuation multiples
  • Ability to capitalize on opportunities to combine companies/assets in order to achieve scale
  • Experience in actively managing companies to reduce costs (Capex, Opex, and G&A) as well as to grow revenues by taking market share from distressed competitors
  • Flexibility to focus on opportunities to extend company customer base beyond oil and gas sector (e.g. power and renewables)