With a robust energy M&A market expected for 2007, the ranks of seasoned upstream and oil-service management teams looking to replicate their past success will surely swell. Fortunately for them, the amount of private capital available to the energy sector is reaching flood-stage proportions. According to one energy-capital source in Connecticut, some $30 billion of dedicated private-equity is now available for investment in the global oil and gas sector versus just $2 billion in 1998. True, a lot of this money is flowing from momentum investors, such as hedge funds, attracted to the 25% to 30% annual returns-and much higher-now being generated by sponsored start-ups in the energy space. But much of this private capital is also coming from seasoned energy-fund managers like First Reserve, Warburg Pincus, Yorktown Partners, Natural Gas Partners, Lime Rock Partners and Avista Capital Partners, most of which have continued to raise larger and larger pools of capital for E&P and service-sector investment during the past several years. For more on this, see the January issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

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