With capital markets leaving traditional financing options challenged, BlackGold Capital Management LP recently provided an alternative to a privately held diversified and multi-generational oilfield services company.
BlackGold, a Houston-based investment firm focused on supplying private credit to the energy industry, said June 5 it had completed a first lien senior secured term loan with Eastham Enterprises Inc. The terms of the transaction weren’t disclosed.
Eastham, also based in the Houston area, provides drilling, machining and forging services to energy companies. The company’s forging business started in 1913. The business, originally named Beaumont Well Works, was founded by Albert Eastham and has since been led by members of the Eastham family.
The Eastham family of companies also include Eastham Machining International and Big E Drilling, which was started in 1981 by Gerald Eastham.
“The Eastham management team has succeeded in the drilling business for over four decades while maintaining a conservative balance sheet and navigating through volatile commodity prices,” according to a press release by BlackGold.
Recently, investors have been applying pressure for greater capital discipline among oil and gas companies, which, as a result, has largely limited the ability to access capital markets for funding needs in today’s energy sector.
However, Erik Dybesland, co-founder of BlackGold, said his firm helps fill this void left by traditional financial institutions.
Since being founded in 2006 by managing partners Dybesland and Adam Flikerski, the firm invested about $8 billion in both public and private energy companies, across upstream, midstream and oilfield services.
“As capital for the energy sector continues to be scarce, our ability to address risk and drive returns for our investors, while creating solutions for borrowers has allowed BlackGold to source compelling underwritings,” Dybesland said in a statement on June 5.
He noted the Eastham loan transaction, which included co-investors, should provide its investors with an “attractive yield, low net debt leverage and solid asset coverage.”
Flikerski also added in a statement: “We continue to find opportunities in mid-sized energy companies for creative structures to address their funding requirements. Our team diligently adheres to our commitment of assessing downside risks and aims to deliver a return stream our investors expect.”
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