A number of prominent private equity investors have mentioned in the past months how the recent plunge in energy prices has created plenty of opportunities for PE. Firms could either invest in high-yield energy debt or snap up assets suddenly struggling as oil & gas supplies remain high and prices low. However, PE investment in the energy space, particularly in the U.S., is off to a slow start, with 1Q 2015 recording the lowest quarterly tally of completed deals in years.
This could largely be a timing factor, as PE firms wait to better assess the fluctuation of energy prices over a longer period of time. Or, perhaps, things will pick up as soon as next quarter—at the end of March, EIG Global Energy Partners agreed to invest $1 billion in O&G company Breitburn Energy Partners (NASDAQ: BBEP) in one of the biggest deals of the quarter. The deal, which helped Breitburn reduce its outstanding balance on a credit line, may signal an increase in PE firms coming to the aid of struggling energy producers as prices remain depressed.
To explore PE investment in U.S. energy further, or to see which PE firms have been fundraising specifically for distressed energy assets, click here.