In this month’s Middle Market Junction podcast, Alexander Montano, Managing Director in investment banking at Roth Capital Partners, sits down with Jon Berke and Rachel Butt of Debtwire Middle Market to discuss the spate of oil and gas producers trying to get their second bites of the apple.
The A&D (acquisition and divestiture) market is heating up as distressed investors, now shareholders in these energy companies, are pushing to realign their portfolios post reorg. E&P players such as Midstates Petroleum Company and LINN Energy are putting non-core assets on the block, in an effort to pay down debt and fund core operations.
While those in the Permian basin are expected to fetch a premium, thanks to its unusual geology and better economic returns amidst USD 50/barrel oil prices, companies in the Gulf Coast and Rocky Mountain region are going to have more trouble finding homes for their assets. The lack of support from commercial banks has also led to limited financing options for potential buyers, prompting a flurry of non-bank lenders to fill the void.
CLICK HERE to read the Middle Market Memo on the issue.