CHAPTER 9 BUSINESS OVERVIEW OF FINANCING TRANSACTIONS
Jurisdiction | United States |
(May 2006)
BUSINESS OVERVIEW OF FINANCING TRANSACTIONS
Natural Gas Partners
Irving, Texas
TONY WEBER
TONY R. WEBER joined NGP in 2004 as Principal and Director of Corporate Finance. He leads the firm's efforts to help its portfolio companies in sourcing, structuring and executing transactions that fulfill their external capital needs. Mr. Weber is an expert at evaluating and applying the full range of debt and equity products available today as well as with custom-tailoring structures to meet specific objectives. He also assists with NGP's transaction evaluation, execution and monitoring efforts.
Prior to joining NGP, Mr. Weber was the Chief Financial Officer for Merit Energy Company where he raised over $1 billion of equity commitments from institutional investors and oversaw Merit's financial operations, which included the active management of the company's commercial bank facilities. Before he joined Merit, NGP enjoyed a strong relationship with Mr. Weber from his position as Senior Vice President and Manager of Union Bank of California's Energy Division in Dallas. During his 14 years as a commercial banker, Mr. Weber was involved in the arranging and financing of more than $4 billion in energy transactions, including senior debt facilities, mezzanine debt structures, project financing and direct equity investments. Mr. Weber received a B.B.A. in Finance in 1984 from Texas A&M University.
Table of Contents
• Overview of Energy Capital Markets
• Market Segmentation
• Capital Providers
• Representative Products and Structures
• Summary
[Page 9-2]
Overview of Current Energy Capital Environment
• Fundamentals are very favorable
• Senior Bank demand for loans is very high
• There are many new entrants in the mezzanine and hybrid debt markets
• Public equity, convertible, high-yield and investment grade debt markets are open to the industry
• Essentially every energy-focused, Private Equity fund (has or) is raising new capital
"For the fist time in 20 years, financing isn't a problem, but rather sourcing, on an economic basis, opportunities to deploy capital is the problem." - Bank of America Securities
The Numbers...
-- Over 100 Private Equity Sponsored Independents in North America 1
-- Over 200 Capital Providers focused on the upstream oil & gas industry 2
-- Over $50,000,000,000 in energy focused equity capital 3
-- Over $172,000,000,000 in private equity capital raised in 2005 alone 4
-- Over $1,000,000,000,000 in hedge funds 5
[Page 9-3]
Energy Capital Spectrum
Energy Capital Providers
• Senior Banks
• Mezzanine Debt Providers
• Volumetric Production Payment Providers
• Other Financial Products and Structures
• Private Equity
[Page 9-4]
DIRECT EQUITY PARTICIPANTS | ||||
1992 | 1999 | 2002-2003 | 2004 | 2006 |
Venture Equity for E&P | ||||
Natural Gas Partners | Natural Gas Partners | Natural Gas Partners | Natural Gas Partners | Natural Gas Partners |
Dillion Read (Yorktown) | Yorktown | Yorktown | Yorktown | Yorktown |
Aeneas Ventures (Harvard) | ||||
Prudential Capital | ||||
T. Rowe Price Threshold Fund | ||||
1818 Fund, L.P. | ||||
Kayne Anderson | Kayne Anderson | Kayne Anderson | Kayne Anderson | |
Quantum | Quantum | Quantum | Quantum | |
Societe Generale | ||||
EnCap | EnCap | EnCap | ||
Greenhill Capital | Greenhill Capital | |||
EOS Capital | EOS Capital | |||
Lime Rock Capital Partners | Lime Rock Capital Partners | |||
Hexagon | ||||
State Farm | ||||
Wellington | ||||
Stanford Management | ||||
Liberty Energy Holdings | ||||
Hicks, Muse | ||||
Eschelon Energy Partners | ||||
Guggenheim | ||||
Large Deal/Wall Street Focus | ||||
DLJ | DLJ | CSFB | CSFB | Avista Capital |
Warburg Pincus | Warburg Pincus | Warburg Pincus | Warburg Pincus | Warburg Pincus |
First Reserve | First Reserve | First Reserve | First Reserve | |
Chase Capital Partners | JP Morgan Partners | JP Morgan Partners | JP Morgan Partners | |
Beacon | ||||
Bessemer | ||||
Evercore | ||||
Hicks, Muse | Hicks, Muse | Hicks, Muse | ||
First Union | Wachovia | Wachovia | Wachovia | |
Riverstone(Carlyle) | Riverstone(Carlyle) | Riverstone(Carlyle) | ||
Morgan Stanley PE | Morgan Stanley PE | |||
Sandefer Capital | ||||
Lehman Brothers | Lehman Brothers | |||
Cerberus | ||||
Blackstone | Blackstone | |||
Texas Pacific Group | Texas Pacific Group | Texas Pacific Group |
MEZZANINE/STRUCTURED FINANCE | ||||
1992 | 1999 | 2002-2003 | 2004 | 2006 |
NGP Capital Resources | NGP Capital Resources | |||
EnCap | EnCap | |||
RIMCO | ||||
Associated Energy Mgrs. | Energy Income Fund | |||
Tenneco Ventures | Range Resources | Range Resources | ||
Black Rock | Black Rock | Black Rock | ||
Torch Energy | ||||
TCW | TCW | TCW | TCW | |
AIG | AIG | AIG | ||
JP Morgan Asset Mgt. | ||||
RPI | ||||
UBS | UBS | |||
Enron Finance | Enron North America | Constellation Power Source | Constellation Power Source | |
Louis Dreyfus | ||||
MG Trade Finance | Stratum (Beacon) | |||
General Atlantic | ||||
Williams | ||||
Aquila | ||||
Heller | GECC | GECC | GECC | GECC |
Southern / Mirant | ||||
Shell Capital | Petrobridge | Petrobridge | ||
Cargill | ||||
Montauk (DQE) | ||||
Dominion (Cambrian) | Macquarie Energy Capital | Macquarie Energy Capital | ||
Deutsche Bank | Deutsche Bank | |||
Prudential Capital | Prudential Capital | Prudential Capital | Prudential Capital | |
Duke Capital Partners | ||||
Wells Fargo | Wells Fargo | |||
Royal Bank of Scotland | Royal Bank of Scotland | |||
Harvard Mgmt. / Sowood | ||||
Goldman Sachs E&P Capital | Goldman Sachs E&P Capital | |||
Prospect Street BDC | Prospect Street BDC | |||
D.B. Zwirn & Co. | ||||
GasRock Capital | ||||
Guggenheim | ||||
American Capital Strategies |
[Page 9-5]
OTHER ENERGY SECTOR FOCUS | ||||
1992 | 1999 | 2002-2003 | 2004 | 2006 |
Direct Ownership of Reserves | ||||
NGP VII Co-investment Fund | NGP VII Co-investment Fund | |||
Merit Energy | Merit Energy | Merit Energy (US & Canada) | Merit Energy (US & Canada) | Merit Energy (US & Canada) |
JP Morgan Asset Mgmt. | ||||
Floyd Oil | ||||
RPI | ||||
RIMCO | ||||
Enervest | Enervest | Enervest | Enervest | |
Hunt Oil | Hunt Oil | |||
Hyperion Resources (Helios) | Hyperion Resources (Helios) | |||
Basa Resources | Basa Resources | |||
Canaan | Canaan | |||
BlackStone (Royalties) | BlackStone (Royalties) | |||
Caritas/Noble (Royalties) | Caritas/Noble (Royalties) | |||
Mineral Acq. Prtns. (Royalties) | Mineral Acquisition Partners (Royalties) | |||
Municipal Energy Resources | ||||
Foundation Energy | ||||
Hawk Energy Fund | ||||
Lime Rock Capital Partners | ||||
Energy Development Partners (North Sea) | ||||
Oil Field Services & Midstream | ||||
Natural Gas Partners | Natural Gas Partners | Natural Gas Partners | Natural Gas Partners | Natural Gas Partners |
First Reserve | First Reserve | First Reserve | First Reserve | First Reserve |
SCF | SCF | SCF | SCF | SCF |
Morgan Stanley | Morgan Stanley | Morgan Stanley | Morgan Stanley | MetalMark Capital |
Aeneas (Harvard) | Charlesbank Capital | Charlesbank Capital | ||
Energy Recovery Fund | ||||
Haddington Ventures | Haddington Ventures | |||
Energy Spectrum (UBS) | Energy Spectrum | Energy Spectrum | Energy Spectrum | |
Beacon | ||||
Lehman Brothers | Lehman Brothers | Lehman Brothers | Lehman Brothers | |
Riverstone (Carlyle) | Riverstone (Carlyle) | Riverstone (Carlyle) | ||
AIG | AIG | AIG | ||
ArcLight | ArcLight | |||
Kelso & Company | Kelso & Company | |||
Energy Infrastructure Partners (K-L Energy) | ||||
Cadent | ||||
Energy Special Situation Fund | ||||
Canada | ||||
Natural Gas Partners | Natural Gas Partners | Natural Gas Partners | Natural Gas Partners | Natural Gas Partners |
Lime Rock (Beacon) | Lime Rock | Lime Rock | Lime Rock | |
ARC Financial | ARC Financial | ARC Financial | ARC Financial | |
R. Chaney | ||||
Camcor | Camcor | Camcor | ||
Energy One | Energy One | |||
Jog Capital | Jog Capital | |||
Kern Capital | Kern Capital |
OTHER ENERGY SECTOR FOCUS | ||||
1992 | 1999 | 2002-2003 | 2004 | 2006 |
Exploration/Drilling | ||||
UBS Asset Mgmt. | UBS / Brinson | Energy Trust | Energy Trust | Energy Trust |
Quantum | Quantum | Quantum | ||
Hunt Capital | Discovery Drilling Funds (Canada) | Discovery Drilling Funds (Canada) | ||
Warburg Pincus | Warburg Pincus | Warburg Pincus | ||
Liberty Energy Holdings | Liberty Energy Holdings | |||
Centaurus | ||||
South View Energy (R&D) | ||||
Energy Technology & Power | ||||
Small Deal Focus | ||||
NGP Energy Technology Partners | ||||
GFI Energy Ventures | GFI Energy Ventures | GFI Energy Ventures | GFI Energy Ventures | |
Rockport | Rockport | Rockport | Rockport | |
Lime Rock | Lime Rock | |||
Braemar Energy Ventures | Braemar Energy Ventures | Braemar Energy Ventures | ||
Kinetic Ventures | Kinetic Ventures | Kinetic Ventures | ||
Dresdner EIF Power | Dresdner EIF Power | Dresdner EIF Power | ||
Prospect Street | Prospect Street | Prospect Street | ||
Nth Power | Nth Power | Nth Power | ||
Solar Development Capital | Solar Development Capital | Solar Development Capital | ||
NGEN Partners | NGEN Partners | NGEN Partners | ||
Moneta Energy and Related Technologies (Canada) | ||||
GEF Clean Technology Fund | ||||
Venture Deal Focus | ||||
Altira | Altira | Altira | ||
Chrysalix Energy | Chrysalix Energy | Chrysalix Energy | ||
Draper Fisher Jurvetson | Draper Fisher Jurvetson | Draper Fisher Jurvetson | Draper Fisher Jurvetson | Draper Fisher Jurvetson |
Kleiner Perkins | Kleiner Perkins | Kleiner Perkins | Kleiner Perkins | Kleiner Perkins |
Technology Partners | Technology Partners | Technology Partners | Technology Partners | Technology Partners |
Vantage Point Venture Partners | Vantage Point Venture Partners | Vantage Point Venture Partners | Vantage Point Venture Partners | |
Venture Capital US Renewalbes Group LLC | ||||
Larger Deal Focus | ||||
ArcLight | ArcLight | ArcLight | ||
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