StrategiesPrivate Equity Funds
Kimmeridge believes that investing in the energy space should be driven by fundamental skills and knowledge. In our view, opportunities in the sector can be broadly subdivided into four themes:
New geological provinces continue to open up. First movers who identify these early can create considerable value through low-cost leasing.
The application of new technology to old fields continues to create new unconventional resource plays, while improving recovery from mature fields. The rapid evolution of technology has created a knowledge gap which is especially pronounced in early-stage plays.
Operators often underestimate the cyclical nature of the commodity markets and believe above or below normal returns will exist for extended periods of time. This creates windows for opportunistic investors to capture mispriced assets.
Public companies continue to be driven by reserve and production growth. This can create opportunities for private entities to acquire declining assets with high returns and material long term option value at attractive prices.