Editor's note: This video interview is courtesy of Privcap.

Privcap: How are energy players responding to what looks to be a protracted pressure on oil and gas prices?

Christopher Click, KPMG: What we're seeing the strategic oil and gas players do is focus on core areas: positions where they have the quality resource and the scale that they can deploy their own specific skill sets and technologies, and be better than the competition in those particular areas.

Privcap: Does this core focus spell opportunity for private equity investors?

Click: As the strategic players focus on certain core assets or positions, it opens opportunity for private equity and financial sponsors. One such play is for private equity to fund the consolidation of smaller parcels in, call them, overlooked or more mature unconventional resources. For example, Blackstone teamed up with Sanchez Exploration and completed a $3-billion acquisition in the Eagleford. Those assets happened to be complementary to Sanchez's existing position in that region, so they're sort of building up an asset of scale through consolidation of smaller parcels.

Privcap: What kinds of investment strategies are the PE firms pursuing?

Click: That theme or hypothesis could be finding value in a mature asset by employing new technologies or operating practices. It could be taking a different position on a future trend—for example, investing in the future of natural gas demand. People are doing some pretty creative things right now and looking for value in fairly mature—or what were considered mature—areas.

Privcap: Some investors are “consolidating stub positions.” What does that mean?

Click: If you're focused on unconventional resources, one of the key elements necessary to improve the economics is having a scale or contiguous scale of the asset base. So, if you have pieces of land altogether, it actually gives you a lot more optionality in terms of the sort of well design or completion design you can do versus if you only own small, disconnected, disjointed pieces. So it's about building that scale that gives you development flexibility and also provides the opportunity to drive operating synergies.

Privcap: Given the outlook for oil and gas prices, how bullish are you about the industry in general?

Click: We're bullish that the sector as a whole can remain resilient and stay competitive. But, as with any race, not everyone can win, so we do think that periods like this drive greater divergence between the winners and the less fortunate. What we expect to see, based on looking at what's occurred during down cycles in oil and gas and other sectors, is that periods like this tend to drive greater divergence between the winners and the losers. Those companies that define and stick to a coherent strategy—that focus on how they can be different and how they can be resilient at these commodity prices—will begin to outpace those companies that are following a lessdefined or more haphazard approach to how they operate or pursue the deal markets.