These days, money seems to be growing on trees in the oil and gas industry. But just because cash is flowing like the gushers of the industry's past doesn't mean it's easy to come by. Capital providers have very specific requirements for those that want their money, and a certain comfort level must be felt by all involved. This is according to panelists at the recent Private Capital for Energy Forum in Houston, hosted by Cosco Capital Management LLC and Oil and Gas Investor. "Is the return for the project commensurate with the risks we are being asked to take? That's the bottom line on each investment we make," said Deirdre McCaffrey of integrated power company Constellation Energy, which offers capital to E&P companies in unique deal structures. "We approach each transaction from a partnership perspective," she said. "We look to allow our partners to operate. We're not an E&P shop; we're a deal shop. We don't have strict deal guidelines, but we work to help our partners exit at the appropriate time." Eschelon Energy Partners has chosen to specialize in smaller, less competitive transactions, said Thomas Glanville, managing partner and founder of Eschelon. "There's a big opportunity in the energy sector right now because the worldwide economy is set for a substantial period of significant growth," he said. "The Chinese are going from no car to car. That's a big jump in energy use." Private equity in the energy sector has become more attractive to investors because of recent returns. "Some of the general funds have come to the party and there's been a lot more action in this area," he said. Eschelon's target investment structure is $5- to $15 million per portfolio company. "The only thing we're really reluctant to be involved with is start-ups with no revenue," he said. NGP Capital Resources invests primarily in asset-based loans and mezzanine securities of small and middle-market energy companies, said John Homier, NGP president and chief executive officer. "We look for good investments we can understand from an engineering perspective. We're looking to have our money employed for long enough that it does us some good." Prospect Energy Corp. operates from a permanent pool of capital that it prefers to invest in companies that lack access to larger liquidity on capital markets, said Grier Eliasek, president and chief executive. "Because we're operating from a permanent pool of capital, we're non-control oriented investors. We don't worry about an exit. We're long-term, patient capital." Prospect closes deals in 30 to 75 days. "But, we've closed 1% of the deals we've looked at over the past year," Eliasek said. "We do move quickly, but we're very choosy." Sowood Capital Management LP gets involved with management of a portfolio company when its expertise can add value, said Carl Tricoli, managing director of Sowood. "An alignment of interests between us and the management team we are backing is crucial financially, as well as philosophically. We have to be aligned on our expectations on exit and how patient we are going to be on the investment."