Not only are the stars aligned, but the “sun, moon and stars are aligned for this window of opportunity for private-equity investment in energy,” said John Moon, managing director for Morgan Stanley, at a roundtable discussion moderated by Cameron Smith, senior managing director for The Rodman Energy Group, at Oil and Gas Investor’s recent Energy Capital Week Forum.

“I haven’t seen an environment this attractive in a very long time,” said Moon. Credit constraint issues have led to a serious dislocation of all energy players, from the very large to small, and could result in “a tremendous turnover of assets and businesses at very compelling valuations,” he said.

Doug Swanson, managing director for EnCap Investments Inc., agreed that the energy sector finds itself with new compelling investment opportunities, and noted that some $30 billion in energy private equity capital has been raised over the past three years.

“I think the stronger fund managers will continue to have access to capital, and will continue to invest in the oil and gas industry,” he said. “EnCap was fortunate in that we sold $3.4 billion of assets in 2008, and distributed over $1.4 billion to our limited partners. Now, we have more than $2 billion to invest from our core fund into an environment with lower valuations.”

Mit Mehta, managing director for CCMP Capital Advisors LLC, takes a balanced approach. “What we see in this environment is the opportunity to transact, but there are going to be winners and losers.”

Opportunities can be found with companies that need to restructure their balance sheets, or need funds for growth or acquisition capex.

—Jeannie Stell