A new player has emerged in the energy capital-markets arena in the Mile High City-Meagher Dunn Capital. Its target clients: small to midsize private and public E&P companies. The boutique, Denver-based energy investment-banking firm has offices also in Houston and Tulsa, and is focused on M&A, private equity and debt financings, strategic advisory services, property divestitures, and valuations and fairness opinions, says Bill Dunn, managing director and co-founder. Dunn, formerly manager of corporate finance and treasury for Apache Corp. and for 12 years a senior investment banker with Hanifen, Imhoff Inc. (now Stifel, Nicolaus Inc.) and First Albany Corp., is joined in the new capital-markets venture by managing director and co-founder Matthew Meagher. Meagher, who has advised on more than $3 billion worth of oil and gas divestitures, is also president of Meagher Oil & Gas Properties Inc. (MOGPI), a 20-year-old Denver-based A&D firm whose engineers, land and technical professionals work with a network of more than 4,500 North American energy companies. "Many of these 4,500-plus small private and public producers that Matt has a relationship with are very active in the acquisition market and are typically in need of capital and corporate-finance services in general," says Dunn. "So both of us saw a good opportunity to combine a corporate-finance effort with a knowledgeable A&D effort that understands the reserve or resource risk of small operators that are either private or off the radar screens of Wall Street market-makers." Says Meagher, "We believe there's a void in the market, in terms of the availability of corporate-finance services to smaller oil and gas companies that are looking for help in such areas as private-capital funding, M&A transactions and strategic solutions." Dunn says the expertise of MOGPI allows the newly formed investment-banking firm to fully understand a producer's opportunity set such that "we can help that operator choose the optimal financing alternative for its opportunity set and properly represent that opportunity to the appropriate investor, whether that's an institution or a strategic industry partner." As of mid-March, Meagher Dunn Capital had four energy transactions pending. These included the private placement of $8 million of institutional equity for a privately held Denver producer and a $12- to $15-million private-equity infusion for a Midcontinent operator. Both fundings are aimed at backing development-drilling opportunities, says Meagher. On the M&A side, the firm is representing a small public E&P company in its merger with a larger private producer; when completed, the combination will create a private entity with an asset value north of $100 million. "We're also trying to bring $85- to $100 million of private capital to bear on a joint-venture development-drilling project involving a $2-billion market-cap publicly traded producer and a large New York-based institutional investor," says Dunn. Notably, the firm expects within the next six to 12 months to also become a broker-dealer which would allow it to act as an agent in private investment in public equity (PIPE) transactions for smaller publicly traded producers throughout the U.S. In such transactions, a public E&P company agrees to issue, up-front to private institutions, restricted shares of its stock that will later become publicly registered. "In the case of a $100-million market-cap company that needs capital for development drilling, a PIPE transaction would permit that operator to access institutional capital quickly versus having to go through the lengthy process of registering its shares with the Securities and Exchange Commission, then conducting a full-blown secondary offering of those shares in the public market," Dunn explains. "So if the market window is open, a producer in a PIPE transaction can get through that window quicker." This capital-raising approach, which allows an issuer to often raise capital in a matter of weeks, also significantly lessens all the accounting, legal and investment-banking fees associated with the traditional stock-issuance route which-between SEC registration and road shows-can take months, he adds.