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Private Equity Pumping Billions Into Oil And Natural Gas

The Huffington Post  |  By Posted: 05/07/2012 2:09 pm Updated: 05/07/2012 2:09 pm

Pe Oil And Gas
Private equity investment in oil and natural gas companies skyrocketed this quarter.

Private equity loves oil and gas.

The money private-equity firms spent on deals in the oil-and-gas industry reached at least a 20-year high in the first quarter of 2012 -- with eleven mergers and acquisitions worth a total of $11.5 billion, according to a new report from research and consulting firm Pricewaterhouse Coopers. That's up 120 percent from the first quarter of 2011, according to the PwC report.

The study was reported earlier by the Wall Street Journal online.

The increased private-equity interest in natural gas comes as new technology and a surge in gas production have put downward pressure on natural-gas prices, as the WSJ points out. Natural gas prices are at ten-year lows, according to a separate report in Bloomberg.

At the same time, oil prices have been dropping in recent weeks, too, with the cost of a barrel of crude dipping below $98 today on the New York Mercantile Exchange -- the lowest intraday price since December, according to Reuters.

The dip in prices has forced companies in the oil and natural gas industry to turn to outside sources to finance research and exploration -- hence the boom in private equity activity, according to the WSJ. Since 2011, investors have pumped $18 billion into oil and natural gas exploration and production companies, the WSJ reports.

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