Capital Formation 2020
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As many await the response of commercial banks to the new commodity outlook—top of mind with a lot of clients—time may be well spent looking into capital sources that offer supplementary or alternative funds that would allow business plans to move forward in an uncertain world.
Access to capital undoubtedly will be constrained in the months ahead. However, oil and gas companies have repeatedly proven themselves capable of adapting to challenging circumstances and of coming up with new strategies that are designed to “survive to the other side.”
Capital Alternatives: Upstream Financing Reconsidered
Even to just survive, E&Ps increasingly must look beyond traditional sources of capital to fund their operations. Here are some other financial structures on the rise.
Energy Commercial Banking: Reserve-Based Loans—with Caveats
A conversation with three commercial bankers reveals that the RBL markets are “open for business,” but none of them are promising it’s going to be easy for oil and gas producers to get fast cash backed by reserves.
Midstream Private-Equity Investors Still Show Enthusiasm
Private-equity firms have billions in dry powder; the only question is timing.
Private Equity Pivots to New Game Plan for E&Ps
Today private-equity providers focus on returns, cash flow, the right incentives and portfolio discipline by oil and gas companies.
Sustained Outperformance Needed from Public E&Ps
Before the coronavirus pandemic and the oil price war, public investors had already thrown down the gauntlet to E&Ps. Companies, arguably, were learning to adapt, and they must keep doing so to access public capital in the new environment.