While EnergyFundz operates in the onshore market, we couldn`t help notice a piece of news about ConocoPhillips `slamming the brakes` on the deepwater market to focus on US onshore unconventionals. In fact, Goldman Sachs recently concluded large US and European E&Ps (Exxon, BP, etc.) are on the hunt for onshore plays. With $150B in their balance sheets, they won`t have any issues getting what they want. At the same time, a recent analysis by Kathryn Downey Miller at BTU Analytics predicts outside capital to independent E&Ps slowing down.
So what does this all mean for small US independents? Sadly, not great news. For a start, small E&Ps operating in marginal plays are often overlooked by the majors. Secondly, if outside financing is slowing down, small E&Ps, according to Kathryn, will feel the pinch even more.
As it is, small E&Ps struggle to find investors. This could be because the investor is located out-of-State (or country). More often, the E&P and investor are involved in different networks and miss connecting with one another.
The good news is there are a host of investors in the wider market that still want to put their funds to work in small E&Ps. They understand US marginal producers make up 84 percent of U.S. oil wells and produce 18 percent of all domestic oil. That’s not to be overlooked. EnergyFundz can help you connect with multiple investors that are right for your E&P.
We’re interested in your thoughts about small E&Ps, especially if you work for or own one. Is your firm struggling? How do you access financing? Feel free to comment below.