Private Equity Strongly Supports E&P ESG Performance

What does it take to woo private equity to the independent E&P sector in the age of ESG?

The Rifle gas field is located among the mountains of Colorado. (Source: Jake Allee/Shutterstock.com)

Follow the money. In relation to private equity investment in the independent upstream sector, the classic guidance from detective stories is also the key to understanding why investors are strongly in support of ESG performance for oil and gas producers.

“Our philosophy is that good ESG contributes to good operating performance and good financial performance,” said Benjamin Dell, who is a managing partner of private equity firm Kimmeridge as well as chairman and interim CEO of Civitas Resources. “You can’t decouple those things. We take it very seriously that ESG performance is our license to operate. There is a natural link. ESG performance is part and parcel of operations, and we consider it an operational line item. Emissions are a line item cost no different than water disposal costs or ad-valorem taxes.”

Civitas claims primacy as “Colorado’s first carbon-neutral energy producer.”

In that context, ESG performance is very much a factor in evaluating acquisitions. 

“ESG reporting is evolving,” Dell said. “High-quality emissions data is difficult to document. Is it real time? Is it measured or calculated? For most people selling assets, high-quality, real-time, measured data that can be authenticated is not readily available.”

Already have an account? Log In

Subscribe now to get unmatched and complete coverage of the Energy industry’s entire landscape!

View our subscription options
  • Access to site wide content
  • Access to our proprietary databases
  • Watch exclusive videos with energy executives
  • Unlimited access to an extensive library of Playbooks, Techbooks, Yearbooks, supplements, and special reports
  • Newly Added! Access to Rextag's Energy Datalink, containing extensive GIS databases of energy assets, production records, processing capacities, physical locations, planned projects, acquisition records, and much more.