Meet Beau Egert

Korean private investment firm Atinum Partners, Houston, has closed several deals since it acquired Sterling USA in late 2009 as a platform for investment in the U.S. energy sector. Houston native Beau Egert joined the firm midway through 2011 as head of business development, in time to become involved in Atinum’s $500-million joint venture with SandRidge Energy Inc. in the Mississippi Lime play. A year previous, Atinum entered the Marcellus shale through a $70-million joint venture with Gastar Exploration Ltd.

Unlike many working in the energy industry, Egert has no family ties to oil and gas. He graduated from Baylor University’s University Scholars program in 2001, where he was encouraged to hone his communication skills and take a broad range of liberal arts courses. He then spent a year at a faith-based non-profit before enrolling in Harvard University’s John F. Kennedy School of Government, where he earned a master’s degree in public policy.

After grad school, he returned to Houston to work on a faith-based initiative for Texas Governor Rick Perry. But he kept his eye out for opportunities in the private sector, and was recruited by Wexford Capital, a Greenwich, Connecticut-based private-equity firm, to assist in building an oilfield-service start-up. He did acquisitions, sourced deals, built management teams and put systems into place. While he lacked a background in energy, there was a 20-year gap between the older and younger generations in the industry, just as there is today.

“They were looking for certain skill sets and someone who could learn and learn quickly,” Egert says.

A year later, family needs brought Egert back to Houston in the summer of 2007. The shale boom was about a year away from kick-off. A friend from his days in the political arena suggested he contact Robert Mosbacher, founder of Mosbacher Energy and former U.S. Secretary of Commerce. Mosbacher returned his call, and he spent several years with the private E&P learning all aspects of the business. After Mosbacher’s death in 2010, Egert began looking at a return to private equity, but a friend put him in touch with Atinum, which he joined in summer 2011.

Today, in addition to his business development work with Atinum, Egert continues to serve on non-profit boards. He chairs the State of Texas’s OneStar Foundation, is on the Hope International Regional Board, remains involved politically and spends time with his wife and three children.

Investor You joined Mosbacher just as prices were soaring, in the spring of 2008.

Egert Yes. I learned the energy business from Bob Mosbacher. When I first talked with him, he asked what I knew about the E&P business. I said, not much, but I can learn and learn fast, and I have a track record of it. He was a wildcatter at heart and took the bet.

I spent the next several years learning. He wanted me to have at least a basic understanding of every aspect…. He sent me to Jackson, Mississippi, to learn from a leasing play that was under way; he had me take a reservoir-engineering course; he had me learn about seismic—it was unbelievable. Then I settled into the external deal side.

Investor What’s in Atinum’s portfolio at present?

Egert From the Sterling acquisition we have conventional holdings in the Gulf Coast in Texas and Louisiana and offshore, where we operate. Then we have the interest with Gastar in its liquids-rich window of the unconventional Marcellus shale; and most recently, the JV with SandRidge in the Mississippi Lime horizontal oil conventional play, again not operated.

Investor What is Atinum’s strategy?

Egert We are early in our investment cycle. We’ll continue to partner with strong operators, but we’ll also continue to grow our operated assets, predominately on the Gulf Coast. From a nonoperated perspective, we’ll add some conventional assets—and probably do another unconventional opportunity as well.

From a portfolio perspective, we think there’s value being overlooked in conventional plays. In terms of natural gas, we can have a longer-term investment horizon if needed. If we can buy gas at the right price, we’re comfortable with that—we don’t want to drill for it right now.

It’s a fine line for us on the nonoperated side. We know we’ll have to pay a premium to get in, so we need to get in early, but we have to balance that with well control and how much risk we are taking on. We have that discussion a lot, internally.

Investor What are your thoughts on a turnaround for natural gas?

Egert I think we’ll see meaningful improvement within two years—that’s not a unique view, I think most people agree. It could be sooner, if industry continues to lay down rigs and shut in wells, and if we get a boost on the power side. But I’m not willing to make that bet. So many people are losing money at this price, it’s got to change.

Investor What do you like best about the industry?

Egert The people. I love other aspects of the industry, such as the challenges, and the treasure-hunting aspect, but I’d put the people above it all. They are unique and fun and fascinating.

—Susan Klann