The Houston Geological Society is a professional society of petroleum, energy, and environmental geoscientists. The HGS supports continuing education, networking, information dissemination, student scholarships, and young professional activities.
HGS North American Meeting
The importance of petroleum and energy worldwide is a crucial issue for all those involved in the sector. This is why the Houston Geological Society held the North American meeting to address the situation of private equity in the oil and gas sector.
The dynamics between sources and uses of private equity funds have become vital and relevant in assessing returns and value added to portfolio assets.
The value chain that drives hydrocarbon production from pore to pump allows for integrating new techniques and technologies to help de-risk opportunities.
Private equity funds and other capital resources are challenged to deploy creative solutions for debt and equity strategies. The terms and theses for allocating investment capital influence the performance of these portfolio assets.
Benefits
The benefits of private equity in the oil and gas industry are much like those of private equity in any other industry. Strong deal expertise and professional capabilities can help management do its job and earn returns for investors. Coupled with access to legitimate work from different vendors will give companies a good brand image in the industry. To go out and look for other deals and opportunities that will create some leverage.
Challenges
But just as there are benefits, there are challenges that affect private equity investing. Regulations and policies have, in recent years, made the oil and gas sector more challenging for lending money. In particular, the ESG movement has created environmental regulations to obtain lines of credit.
Zac Coplon, a co-founder of Blue Bison Analytics, commented, “The reputation of oil and gas has been dirty and environmentally damaging. Which makes it substantially more difficult for private equity to attract investors.” The oil and gas sector must begin to form its change, based on its technology, to fix its reputation, so the money starts coming in. That’s why industries with ESG criteria are counting on loans.
Know your business
Devon Dixon, managing director of BDO’s southwest region, also spoke at the meeting, commenting that:
- companies must know their business,
- what they are selling,
- and what they are buying to win in the marketplace.
Devon is a tax expert and called on those who need help to use his company’s 6-step formula.
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