Investors are willing to fund the development of non-conventional energy sources, making financial officers at energy companies optimistic they will have access to fresh capital for developing unconventional resources in 2012. The BDO USA LLP 2012 Energy Outlook Survey showed that 79% of chief financial officers (CFOs) cited the discovery of significant new resource plays as the most important factor driving overall industry growth in the coming year.

BDO, a tax and consulting company, recently surveyed financial officers about their expectations for 2012. Only 10% of CFOs in the survey cited access to capital as their greatest financial challenge, down from 22% in a similar survey last year.

Many CFOs believe that access to unconventional oil plays, primarily shale, will continue to draw the attention and capital of investors, just as it did in 2011. A total of 13 master limited partnerships went public in 2011, most of which were in the midstream sector.

"We are in the midst of a significant global shift as non-conventional energy sources become more attractive to oil and gas companies," says Rocky Horvath, a partner in the Natural Resources industry group at BDO USA. "I expect that we will continue to see interest and investment in unconventionals as the U.S. takes center stage in this transformation."

The survey also found that as unconventional production methods (horizontal drilling and hydraulic fracturing techniques) create new opportunities for U.S. oil and gas companies, opportunities for mergers and acquisitions (M&A) will remain in the coming year. More than half of CFOs surveyed expect M&A activity to increase in 2012, up from an active year in 2011.

The optimism in the energy sector contrasts with the broader market sentiment for other recent IPOs. Also, evidence shows that investors prefer established companies as the general equity indexes remain lackluster. The Renaissance U.S. IPO index, which tracks recent public offerings in the U.S., fell nearly 22% in 2011, compared with a relatively unchanged performance of the broader S&P 500 index.

Meanwhile, the industry has received mixed reports about the market's enthusiasm for the midstream sector. Inergy Midstream LP held an IPO at the end of 2011, selling 16 million units at $17 per unit—a price below the previously indicated range of $19 to $21 per share. Yet, since then, its price has risen slightly faster than the market as a whole.

Hart Energy's analysis shows ongoing interest in funding midstream companies. At least 11 debt and equity deals were announced or completed in December 2011, closing out the strong year with a flourish. The total capital raised exceeded $3.8 billion and the average of the 11 separate deals was nearly $350 million. The largest acquisition came from Kinder Morgan Inc., which acquired El Paso Corp. for about $38 billion in debt and equity.

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