[Editor's note: A version of this story appears in the July 2021 issue of Oil and Gas Investor magazine.]

In July 2016, Deutsche Bank analysts reported almost as a footnote that private equity firm KKR & Co. Inc. had $2 billion available and ready to spend on energy investments. The somewhat hackneyed term for this largess is dry powder.

The next year, Jefferies estimated that energy-focused funds had about $100 billion ready to deploy. These were the powder keg years, with private equity chasing after sparks in Texas, the Rockies and the Northeast.

Whether those days fizzled or dazzled for private equity firms, there’s a growing sense that the keg is running empty—and with it an acknowledgment that money won’t be raised quite the same way again. That also means potential pressure on sellers who want a good price but may see their off ramps running low on cash.

Recent deals by private equity firms show a maturation in dealmaking from the buy-drillflip days of shale glory to a more measured approach that considers a company’s geography—possible merger partners, access to infrastructure—as much as its geology.

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