Energy ‘Drill-and-Dump’ Roadmap for Private Equity Has Ended

The biggest players in energy have gathered in Houston for IHS CERAWeek, amid the worst price rout in six years. Here are five takeaways from Wednesday’s sessions:

* For U.S. private-equity firms, the days of drill-and-dump are over, said Blackstone Energy Partners CEO David Foley. Low commodity prices mean the time-tested formula of buying shale acreage, drilling a handful of wells to show there’s gas or oil and then selling out to a major energy producer is dead. “Those days are history,” said Foley, whose firm has invested in wells in Louisiana’s Haynesville shale. Now, the changing North American energy landscape is forcing private-equity firms to turn discoveries into producing fields, which means finding experienced management teams that know how to efficiently harvest the fuel.