Latest State of Oil & Gas Private Equity
Curious to hear how the sector has been holding up? Have heard about numerous funds that weren't dead 12 months ago / still doing deals in late 2018 - early 2019 that are now screwed / will not be fundraising again. This includes a couple of the megafund teams focused on energy. Seems like the flavor of the day for those who are still active is to re-brand as an infrastructure-focused vehicle that can still have a mandate to look at midstream/downstream.
The space is fundamentally impaired.
No feasible liquidation events existed for shale upstream investments or oilfield services pre-COVID, and the paper-heavy mergers all got put on hold post COVID.
No lending existed for deals pre COVID, with lenders sometimes hiding behind ESG as the reason, but really the risk-adjusted return profile makes absolutely no sense.
Since 2010 a literal mountain of cash has been lit on fire. One of the great bull runs in history missed O&G... lots of production growth, negative free cash flow.