Private money fills some oil gaps left by public investors

Oil companies collected more spending money from private equity firms than Wall Street investors in the first three months of the year, a new report shows.

Private firms made 33 investments in the oil industry in the first quarter. Firms disclosed the size of only 17 of the investments, and those came in at $8.3 billion, according to Houston adviser Petroleum Listing Service, or PLS.

By comparison, oil companies raised $6.1 billion in 24 public offerings, making it the worst quarter since 2010. That’s down from almost $15 billion in 40 offerings in the previous quarter.

The pullback by public market investors is giving private equity an opening into the sector. Private equity firms have raised more than $200 billion in funds for energy investments since 2014.

About $50 billion of the capital raised was set aside for shale drillers, according to research firm IHS Markit. Private equity firms typically spend anywhere from $150 million to $500 million investing in a new oil company or snapping up acreage in U.S. oil patches.

In the first quarter, the biggest private equity investment was made by Stonepeak Infrastructure Partners of New York and Houston, which paid $1.1 billion to fund a joint venture with Houston pipeline operator Targa Resources.

Apollo Global Management followed close behind with a $1 billion investment in Fort Worth driller Double Eagle Energy Holdings III. Blackstone, another New York private equity firm, poured $1 billion into Mime Petroleum, a Norwegian oil company.