High commodity prices and record returns on investments have turned the oil and gas sector into a powerful capital magnet. The financial side of the business has become even more crowded with traditional investment banks, private-equity providers, venture-capital firms and institutional investors, each vying for opportunities to place capital with winning management teams. While this "capital push" has allowed many E&P companies to grow, it has also pushed acquisition prices up, made oilfield services harder to snag and launched a whole new crop of competitors into the oil and gas space. Here's how some producers are reacting. For several private E&P companies, once they've secured funding in the private-equity markets, it triggers a stream of offers from other capital sources that want to put money on a sure thing. In 1998, Chuck Perrin, chief executive of Tulsa, Oklahoma-based Rockford Energy Partners II, decided he wanted to leave his role as general manager of business development of Apache Corp. in Houston and strike out on his own. He joined Bob Anderson and Kyle Travis to form Sapient Energy Corp. with $15 million of private-equity capital from Natural Gas Partners and later sold Sapient to Chesapeake Energy Corp. for a cool $135 million. For his next venture, Rockford I, he raised $15 million in private equity from Quantum Energy Partners, and sold the company to Newfield Exploration Co. and others in 2004 for $56.8 million. For more on this, see the October issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

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