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No Quick Exit from Permian Oil for Private Equity - RS Energy

Gasoil News - Published on Fri, 19 Jul 2019

Image Source: Business Wire
Bloomberg, citing RS Energy Group, reported that private equity has been ramping up its investment in Permian Basin oil and natural gas production, but the old strategy of selling out after a few years is no more. Simply tapping a team of oil executives to find a good spot in the Permian of West Texas and New Mexico is no longer enough to attract buyers. Investors want proof that companies can generate reliable cash flow.

RS said in a blog post “It will be increasingly rare for companies to flip in the traditional three- to five-year period, even though many portfolio companies put together great asset packages. The management teams chosen to build will now be required to operate, which can be an intimidating change to their sponsor.”

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Posted By : Ratan Singh on Fri, 19 Jul 2019
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