Record-setting multiples mark some of the recently announced deals in select U.S. basins, and Doug Rogers, a managing director with Evercore, in Houston, has been in the middle of them. Rogers joined the independent investment banking advisory firm in 2011 to co-found its upstream advisory practice as part of its oil and gas group, which now numbers some 70 individuals.

A native of Springfield, Oregon, Rogers graduated from Brigham Young University with a degree in chemical engineering. While the university doesn’t have a petroleum program, it has several well-known authors of oil and gas texts on its faculty and is a recruiting base for ExxonMobil. Rogers joined the supermajor as a reservoir engineer after graduation and spent the next five years on projects in the U.S., the Middle East and Eastern Europe.

After earning his MBA from the University of Texas, he moved to Tristone Capital as an A&D engineer. When Tristone was sold to Macquarie, he joined BMO Capital Markets to help launch its A&D practice. About five years ago, he was given the opportunity to start up the A&D and upstream group together with other individuals from Scotia Waterous.

In his spare hours, Rogers enjoys time with his family, woodworking and dirtbike riding.

Doug Rogers

Investor What do current marquee deals say about the market?

Rogers Evercore has led the sale of several recent very high or record-setting-metric asset transactions: QEP Resources’ $600 million purchase in the core of the northern Midland Basin for nearly $60,000 an acre; Concho Resources’ buy in the Delaware Basin for about $25,000 an acre; and EnerVest’s combined purchases of Eagle Ford assets for $1.3 billion, which may not have been a basin record, but nonetheless sold for a large metric.

What you notice with these deals is they are all high-quality, tier one, core acreage assets. Evercore doesn’t get credit for that, by the way; credit goes to the companies that put the assets together. But what we’re seeing is that if a public company wants to compete for an asset, it has the cost-of-capital advantage. As what I refer to as the “terminal” or “final” buyer, public companies can bid aggressively. The publics aren’t usually as aggressive on riskier acreage; that’s where private equity can buy, improve and sell.

Investor You worked on Kinder Morgan’s corporate acquisition of El Paso soon after joining Evercore. What did you learn?

Rogers Obviously, it was a huge deal, with midstream and upstream components involving separate valuations, parallel processes, etc. It was the first opportunity for upstream and midstream, technical and finance to work together—the implementation of what we had all envisioned when starting the group.

In a normal, healthy market, we get the benefit on the technical side of being involved in corporate M&A, fairness opinions and capital raises in addition to typical A&D sell-side mandates. There’s breadth and depth to what we work on, so professionally it’s a dynamic work environment. The Kinder Morgan/El Paso deal was a good example of that.

Investor What do you particularly enjoy about your job?

Rogers We do a lot of work with family companies, private equity sponsors and private equity-backed companies—people the partners have known for years. The ability to deal with individuals who may have built their companies by taking a big gamble, and having the result be transformational for the individual’s life and livelihood—that is very fulfilling.

Investor Have we hit bottom?

Rogers From a price standpoint, it seems like we’ve bottomed and are slowly coming back up. At the very least, things have started to stabilize, and that is crucial for the transaction market.

But the real story is the equivalent price. By reducing costs and staying lean, companies and the industry no longer need oil to go to $100 for financial health to return. Oil can go to $65 or $70 and results can be as good as, if not better, than when it was $100. The transaction market is coming back; what is slow to catch up is damage to balance sheets, where some companies have been paralyzed quarter after quarter. That takes time.

Investor How is capital access currently?

Rogers It’s improving. There are five or six different avenues now. The equity markets never really closed; they’ve been open if you have a good story. When Concho and QEP did those acquisitions, they both issued equity to get the deals done. I don’t know why it doesn’t happen more often, frankly. If a company is trading at $40,000 an acre and can buy acreage for $30,000, it can bring more equity onto its balance sheet, and that will help fix debt and leverage ratios. It solves many problems—but the asset has to be one that the market wants.

What is still tight is bank debt and high yield. There is a lot of private equity money, which is bridging to do more mezzanine and DrillCo-type deals.That money is very smart, but it’s available for deals that make sense.

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