Why Tech Savvy is Critical to Success

As the shale revolution reaches its sixth inning, partnering with tech-savvy management teams remains the key to success for Natural Gas Partners (NGP).

“We know where the resource is,” says Tomas Ackerman, managing director of NGP funds. “For the most part, we’ve identified all of the major shale plays. The skill now is getting the resource out as efficiently as possible.”

NGP is looking to back teams with a technical edge—geologists, engineers—so they can drill more efficiently than “the guy next door,” says Ackerman. He adds that engineering skills are paramount.

The firm has also been seeing more young teams be successful in today’s rapidly evolving operating environment.

“The trend going forward is going younger on management teams,” he says. “The advantage with [people in] their 30s is they’ve been drilling horizontal wells their entire careers. Horizontal drilling and completions continue to evolve, and the 30-35-year-olds have been on the cutting edge of shifts in technology.”

NGP has actively recruited and sought out talent for management teams that in the past may have been deemed to “not have enough gray hair.” Ackerman calls the shift “an interesting trend that NGP has been at the forefront of.”

“We’re comfortable being a little younger,” he adds. “The other benefit is we get to restart with these entrepreneurs several times over after they sell their first company.”

With technology continuing to be embraced by the energy sector to optimize drilling and completions, it’s important to find people who can keep up with the evolution, Ackerman says. He notes that the energy sector is starting to parallel the tech sector in that it’s skewing younger to find talent able to adapt to the changing technology being used.

NGP funds property acquisitions and development drilling, with these two upstream segments taking up the bulk of investment dollars, he says. About 80 percent of investments go into the upstream side; another 15 percent goes to the midstream space; and the last 5 percent goes to the service side of the energy sector.

“It all kind of flows from our knowledge of the upstream side,” Ackerman says. “We have 50 portfolio companies across North America, which gives us great visibility into emerging trends that we use to benefit our midstream and service investments.”

So far this year NGP has taken five companies public, and prides itself on having in-house lawyers and financial experts who have been through the process before.

“We partner with the brightest technical guys in the business,” Ackerman says. “We’re here to help them with strategy and financing. For the technical side, we rely on them.”