Covalence Investment Partners
Dedicated to traditional energy investments, employs a
demonstrated strategy aligning partners and assets in an effort to achieve optimal success.
A Differentiated Strategy for Traditional Energy Investing
About Covalence Investment Partners
Covalence Investment Partners was founded by David Habachy and David Krieger in 2023 and is headquartered in Houston, Texas.
The Firm was established to invest in the traditional energy sector, which Covalence believes is at an inflection point.
Covalence Investment Partners will seek to apply a disciplined approach to acquiring assets and implementing an operationally intensive method to managing the assets inwhich it invests as they have done together since 2017. They blend a range of complementary financial skills and a foundation of technical and operational expertise.
Their overall experience in O&G operations includes investments in and providing oversight to assets in many O&G basins in North America.
Covalence Investment Partners
Investment Strategy
Covalence Investment Partners seeks to target what it believes are mature, attractive assets.
The initial focus lies on properties meeting specific criteria, including situations where the principals possess firsthand experience. The emphasis is on properties that we believe have a high likelihood of completing a transaction, primarily featuring proved, developed, and producing wells as the predominant assets.
The approach is commodity-agnostic, but attention is directed towards commodity price differentials and access to end markets.
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Reserve Quality
Seeking assets with the following reserves characteristics
1. High certainty
2. On stable decline (8-12%)
3. Reserve life index at last 8 Years
4. 80%+ PDP
Seeking assets with the following reserves characteristics
1. High certainty
2. On stable decline (8-12%)
3. Reserve life index at last 8 Years
4. 80%+ PDP
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Cost Structure
Seeking assets with the following cost structure
1. Clean ops
2. Low operating & capital costs
3. Low reclamation costs
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Marketing
Seeking assets with the following marketing characteristics
1. Confirmed takeaway capacity
2. Low price differentials
3. Ability to hedge
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Reinvestment Opp.
Seeking assets with the following reinvestment opp
1. < 30% of EBITDA to reinvest
2. Well workovers
3. Infill drilling
4. Tuck-in acquisitions
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ESG / Regulatory
Seeking assets with the following ESG / regulatory characteristics
1. O&G friendly jurisdictions
2. Ease of operating/permitting
3. Little/no title issues
4. Minimal environmental issues
5. Visibility to reduce CO2 and CH4
- *There can be no guarantee that Covalences ESG efforts will be successful or that its investments create a positive ESG impact.
Execution
Extensive Experience
Knowledge of asset quality across basins and geologies
Proprietary Network
Offers ability to source and transact on potentially attractive assets
Mergers & Acquisitions
Experience with pricing and M&A transactions
Environmental Stewardship
Covalence Investment Partners aims to conform with best practices in environmental and sustainability stewardship
Materially monitor and seek to reduce emissions cost-effectively
1. Timely monitoring of methane emission
2. Minimize flaring
3. Create programs to anticipate and minimize leaks where possible
Seek to maintain leading environmental standards in managing oilfield operations
1. Closed system production of piping as much oil, gas, and water as commercially possible to minimize trucking, venting, and/or flaring
2. Utilize chemicals appropriately and sustainably where possible
3. Reclaim abandoned wells/properties in a timely and proper manner
In tandem with the safe and clean operation, seek to implement a proactive ESG program
1. Influence, adopt, and adhere to industry standards for reporting and regulations
2. Work closely with reputable peers and third-party ESG firms for continual learning and adoption of industry-standard practices
