John Goodgame and Daniel Sinaiko Discuss Energy Industry with Corporate Counsel Business Journal
Akin Gump partners John Goodgame and Daniel Sinaiko have been featured in the Corporate Counsel Business Journal article “Exciting Times for Energy Lawyers,” in which they talk about the state of the energy industry and describe how the current environment is pushing capital toward new opportunities.
The two spoke first about the transactional trends they are each seeing. Goodgame, a securities lawyer who does strategic transactions mainly for upstream and midstream oil and gas businesses, highlighted recent consolidation in those areas. “Acquirers,” he said, “have been beaten up by the markets for paying premiums. In terms of raising capital, investment grade debt is available to oil and gas companies, but mostly for refinancing existing debt. We haven’t seen a lot of public market debt for new projects or acquisitions.”
Sinaiko, who represents clients in the purchase, sale, development and financing of infrastructure projects, said there has been “a flight of capital from the conventional natural resources sector” with it mostly going to projects “that produce stable returns in adjacent sectors that investors know – downstream assets such as power plants, liquefied natural gas terminals and those sorts of things.” He added that he has seen large investments in renewable and gas-fired power projects.
The conversation shifted to master limited partnerships and yieldcos and their roles in the energy sector. It also touched on corporate governance, regulatory and compliance issues facing the energy sector.
Looking ahead, Goodgame said the oil and gas space is seeing greater production efficiency, due to companies being “so focused on returns and profitability that they’ve got to reduce the cost of producing their products.” He also alluded to “some interesting technologies in the gas and liquids export world, including some export projects around compressed natural gas.”
Sinaiko said the microgrid revolution, which “arises from the desire for a cleaner and greener power supply,” is an interesting technology in the sector, as it is related to the need “to shore up reliability locally.”
To read more of the interview with Sinaiko and Goodgame, please click here.