SPECIAL
REPORT
Blackstone at the time
also teamed with Jay Still,
a former senior executive
for Pioneer Natural Re-
sources Co. and Laredo
Petroleum Inc., to create
Dallas-based, Midland
basin-focused Guidon En-
ergy. Together, they ac-
quired 16,000 net acres in
the core of Martin County,
Tex. Blackstone and af-
filiated funds committed $500 million of capital
to Guidon, “with the potential to commit signifi-
cantly more” in future acquisitions. The firm plans
to “develop its leasehold through manufacturing
styled horizontal well development.”
Rowland noted, “A lot of people think private
equity is the mainstay of capital in this business,
and I think for larger fundings, private equity at
$250 million and above is still
the most frequently used.” If
“you get a good project with a
good equity partner and a well-
known operator, the money is
not only available but it’s in-
credibly cheap relative to what
I think the risks are.”
However, Rowland, whose
IOG Capital partners with
companies on projects smaller
than most of those involving
private equity, mentioned that some longstanding
independents struggle with the added outside in-
fluence of a private equity firm. “The private equity
boards that I have been on in the past, sometimes
at the request of the private equity sponsor, show
that basically all the decisions have to be made at
the private equity level.” He noted that the partner-
ship “takes an element of control out” for the oper-
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IOG Capital is “sort of the antiprivate
equity model.” The firm doesn’t make
decisions for the operator—it’s “truly an
oil and gas partner” and “people who’ve
been in the business a while like those
kinds of relationships.”
—Marc Rowland
