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Found: Small, Strategic Capital For Oil Producers

These private equity firms fund both conventional- and unconventional-resource ideas and oil and gas producers needing less than $200 million to make their plays.

Ellen

Chang

Contributor

Ellen Chang, Contributor

Thu, 01/10/2019 - 08:30 AM

These private equity firms fund both conventional- and unconventional-resource ideas and oil and gas producers needing less than $200 million to make their plays. (Source: Hart Energy/Shutterstock.com)

[Editor's note: A version of this story appears in the January 2019 edition of Oil and Gas Investor. Subscribe to the magazine here.]

Some public companies’ stock prices are depressed, so issuing more stock is not the solution. And fewer privately held producers are completing IPOs as potential shareholders remain cautious on commodity prices.

For example, Dallas-based Berry Petroleum Corp. (NASDAQ: BRY) that was spun out of Linn Energy Inc. aimed this past summer to raise $367 million from its IPO for itself and for selling shareholders. The deal priced at $14 a share rather than the $15-to-$17 estimate and 13 million shares were sold rather than 21.6 million.

For producers seeking other capital, private-equity investors remain. These three firms seek deals of less than $200 million and tend to focus on less-popular basins that still have a large amount of reserves remaining.

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Powder River Basin

Ellen Chang

Ellen Chang is a freelance journalist who is based in Houston and writes articles for TheStreet and U.S. News & World Report.

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