Lime Rock Executive Q&A: A Time To Pause, A Time To Buy

To everything there is a season, and while others might find this a time to scatter stones, this disciplined and prepared E&P is busy gathering them. The principals of Lime Rock Resources talk strategy, A&D and practiced patience.

Steve

Toon

Oil and Gas Investor

Fri, 01/17/2020 - 04:30 AM

Lime Rock Resources Executive Q&A: A Time To Pause, A Time To Buy

Fifteen years ago Lime Rock Resources LP co-CEOs Eric Mullins (right) and Charlie Adcock (left) built the direct investment fund on an acquire-and-exploit strategy, which still works today. “A lot of folks ask what’s the inherent value of [an] asset,” said Mullins, “but that’s not the question we’re asking. The question we’re asking is ‘What price can we pay for this asset and make money for our investors?’ It’s a very different question if you think about it.” (Source: Steve Toon/Hart Energy)

It’s been a good ride, the fast and furious ramp up and build-out of the shale plays, fueled by a slug of capital looking for quick returns. But it’s the patient money that once ruled oil and gas investments, and is coming to the fore once again as investors call for capital discipline. One company in particular never wavered on that model.

Lime Rock Resources LP, a Houston-based private-equity firm that directly buys and operates its own assets, was formed 15 years ago on an acquire-and-exploit strategy with intent to generate investor returns through distributions and long-term gains. That was the polar opposite of the find-and-flip model other private equity pursued during the nadir of shale, and which is essentially defunct today.

Oil and Gas Investor visited with Lime Rock Resources co-CEOs and managing directors Eric Mullins and Charlie Adcock in their Houston office in December.

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