Private equity's lean machines are demanding a shake-up of traditional legal service delivery – particularly in the margin-sensitive oil and gas sector. Stuart Carter, head of oil and gas at Fieldfisher, looks at how law firms are responding to the market's changing needs.
Frost Cochran’s firm spends millions of dollars every month to build and expand pipelines that move crude oil in West Texas. But drillers are pumping so much oil that the Houston investor has stopped guessing when it might finish paying crews to dig trenches and weld steel as demand for the pipeline network, which now stretches across 850,000 acres, appears insatiable.
Norwegian private equity fund HitecVision has restructured oil service group Apply after more than doubling its stake through a £37.5million investment.
Private equity firm Energy Ventures said today that it "believes in the North Sea" after revealing plans to invest $200million (£160million) in the region.
A new services player backed by private equity funds has been established in the Norwegian market. WellConnection Group has been formed with acquisitions of Eurotechnology InCon AS, Frank Mohn Mongstad AS and WellConnection Subsea AS. Equity funding was provided by Energy Ventures Private Equity (EVPE) to WellConnection Group to support the company’s planned growth strategy.
Private equity has, like the upstream oil & gas industry itself, been caught out by the speed and scale of the downturn, a key practitioner with a long North Sea track record has admitted.