The oil and gas sector is spending upwards of 70% of cash flows, but with the consolidation frenzy sweeping the industry, there’s still an appetite for capital, a number of panelists said during the SUPER DUG Conference & Expo in Fort Worth, Texas.

Companies just need to think creatively to find cash, they concurred.

“It's hard to find good teams, good projects, but there is some capital, especially the acquisition financing,” Michael Bodino, Texas Capital Bank managing director, said May 16 during a panel discussion on financial trends.

Russell Weinberg, Energy Capital Solutions’ founder and managing director, said private equity has “largely left the building,” forcing companies to be “creative to find that capital.” As a result, family offices are attracting and getting a lot of attention, he said.

Weinberg warned that bringing family offices to energy industry investments can be like "herding cats," but said it can be an excellent source for businesses.

Considering the cash flow conundrum, debt is being priced cheaper, Bodino said.

“There's always been a premium paid to get debt, particularly for the users of that capital in this industry. [But] because the balance sheets are so strong, they have a cost of capital advantage versus other industries right now, which is kind of unique,” Bodino said.

Total Sand Solutions CEO Stuart Weinman said there’s a different balance in the risk reward from the institutional side.

In terms of debt, Weinman said the amount of debt that a company needs to consider depended on where the company was in the cycle.

“If you're at the top of the cycle, you probably want to use equity over debt because you can never deflate your way out of the debt problem,” Weinman said. “If you're at the bottom of the cycle, I think you probably want to use a little bit more debt than equity because it's much easier, [and] you can just inflate your way out of that problem.”

But, equity is also available and a number of companies are looking at public markets to access capital, Bodino said.

“We're seeing it across a myriad of energy industries, not just upstream,” Bodino added.

M&A deals continue—and not just for the larger companies, according to Russell Weinberg,  Energy Capital Solutions’ founder and managing director.

Panel moderator James Wicklund, managing director at Parks Paton, Hoepft & Brown had an easy suggestion for clients pondering whether they should go public or not.


RELATED: Q&A: PPHB’s James Wicklund on North, South American LNG, Irrational Net Zero Ambitions


"I have spent years telling clients, 'If you want to get rich, don't go public. Sell the company,'" Wicklund said.