Having started a business during the financial downturn of 2008-2009, Christina Chen knows that downcycles can be a great time to invest. That company’s recent iteration, Carrier Energy Partners LLC—a private-equity-backed firm of which she is co-founder, vice president and CFO—has the requisite capital to be active in this downcycle as well.

A native of Charleston, West Virginia, Chen graduated from Harvard University with a degree in applied mathematics. She joined Goldman Sachs’ corporate treasury department after graduation. Seeking to add specific industry expertise to her macro view of the financial world, in 2007 she moved to Goldman’s Houston office to join its E&P Capital group, which was investing in E&P companies via mezzanine debt and equity.

With the collapse of the general finance markets at the end of 2008, Goldman disbanded the group and Chen consulted for one of its portfolio companies. In the spring of 2009, Mark Clemans, an engineer and formerly a vice president with Goldman’s E&P Capital group, asked her to join in forming a nonoperated oil and gas business for a Fortune 200 firm. They started up Carrier Petroleum LLC to acquire oil and gas producing assets as a physical hedge against the client’s significant diesel fuel costs. For four years the partners sourced, negotiated, closed, and managed transactions resulting in nine different assets spread through U.S. unconventional resource basins. At their peak, the assets produced more than 4,000 net barrels of oil equivalent per day.

In early 2013, changes within the client company reduced the emphasis on a crude oil hedge strategy. Chen and Clemans decided it was an opportune time to leverage their transactional expertise and experience in building a nonop company. They went on a mini-road trip to New York and returned with $300 million in backing from Riverstone Holdings LLC to start Carrier Energy Partners in the fall of 2013.

Chen is on the board of directors of the Harvard University Club of Houston and enjoys tennis, which she played competitively from a young age and for two years at Harvard. In a recent interview, she discussed Carrier’s strategy.

Investor: What’s different about Carrier?

Chen: We are a bit unique for a private-equity-backed company in that we take nonoperated interests in E&P assets. Riverstone was a good choice for us because they believe in this strategy; we see the world similarly.

In 2013, when we were forming Carrier, the unconventional plays had taken off and operators had aggregated large acreage positions and needed capital to help drill and develop the assets. Our plan was to be a joint venture partner to help their funds go further and to accelerate the development and derisking of assets to get them ready for sale.

Investor: What are your deals to date?

Chen: We closed our first deal last summer, with Panther Energy Co. II LLC. We are a 49% partner in its 15,000-acre position in the Delaware Basin, where it is drilling horizontal Wolfcamp wells. Panther is a Kayne Anderson-backed company that has a proven track record of building very successful companies.

Investor: Has the downturn slowed your program?

Chen: No. We were fortunate that at the time that crude prices began to fall substantially, we were in the early stages of our program, drilling our first few wells. We had no production, so we didn’t take a hit in cash flow; we had no borrowing base redetermination ahead of us. Our strategy is to continue drilling wells, taking advantage of the lower-cost environment. Drilling costs have come down some 20% to 25%, so for us it’s a good time to drill. Our ultimate goal is to derisk this asset and when prices recover, exit. Our asset still makes economic sense in this price environment.

Investor: What’s next?

Chen: We’re in the final stages of closing a deal in South Texas with another private-equity-backed team. Again, they’ve put together a significant acreage position, and we will be helping them to drill it out in a joint venture. We have about 40% interest in this deal. And, we have a third deal in the pipeline.

Investor: What attracted you to this industry?

Chen: On the big picture level, it’s a dynamic industry with constant advances in technology and other innovations, with relevance to everyone. On a smaller scale, the work is challenging. You have the transactional nature that is always exciting and unpredictable, but it is also very analytical and quantitative, which, given my background, is appealing.

Investor: Any other takeaways about this industry?

Chen: The current downturn has shown us that if you invest in the right asset, you can protect yourself in some ways from commodity price volatility. On another note, a pleasant surprise has been how small and connected the oil and gas community is. For example, I typically play in the World Oilman’s Tennis Tournament each year, and I’ve met a number of interesting people through that who have become friends, business partners or both. It is a great industry to be in.

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