Investment Strategy

Fulcrum’s primary approach to building asset value is through active ownership and unique industry relationships. Under normal market conditions, we seek to take sizeable positions in smaller oil and gas companies, enabling us to heavily influence business strategy and operational efficiency. Fulcrum also focuses on opportunistic investing. We will structure positions in asset level interests, structured equity, and private debt instruments, with the flexibility to either hold the investment over a medium term horizon or maximize value through an attractive exit opportunity.

OUR APPROACH

Fulcrum believes in disciplined investing and concentrating on deep value opportunities.

Niche Focus

Pursuing the best investments available, within a segment of the market that is under-capitalized

Ability to Price Risk

Investing across the capital structure where risk is mispriced

Patient Investors:

Approaching investments with a longer-term perspective to maximize value

Prudently Timing The Market Cycle:

Opportunistically investing capital when others have acted prematurely

Value Orientation

Mitigating risk through fundamental analysis and sound judgment, not generic models

Good Companies, Bad Balance Sheets

Identifying well-run businesses and assets with strong market positions constrained by over-leveraged capital structures

Active Owners:

Engaging with management to create value

OUR APPROACH

Fulcrum believes in disciplined investing and concentrating on deep value opportunities.

Niche Focus

Pursuing the best investments available, within a segment of the market that is under-capitalized

Value Orientation

Mitigating risk through fundamental analysis and sound judgment, not generic models

Ability to Price Risk

Investing across the capital structure where risk is mispriced

Good Companies, Bad Balance Sheets

Identifying well-run businesses and assets with strong market positions constrained by over-leveraged capital structures

Patient Investors:

Approaching investments with a longer-term perspective to maximize value

Active Owners:

Engaging with management to create value

Prudently Timing The Market Cycle:

Opportunistically investing capital when others have acted prematurely

Our Investment Criteria

Transaction Type

Hedges
After Investment

Finding Non-Marketed
Relationship Deals

Returning Cash Flow
to Investors

Sell After
~5 Years

  • Ability to hedge-in a robust base return, with substantial downside protection
  • Pursuing new financings in areas with little access to current capital markets
  • Pursuing financings at valuations supported by producing reserves and current cash flow
  • Non-marketed relationship deals
  • Niche transactions in the distressed and special situations space
  • Transactions where the majority of overall invested capital is returned through asset cash flow over a medium-term hold period

Our Investment Criteria

Transaction Type

Hedges
After Investment

Finding Non-Marketed
Relationship Deals

Returning Cash Flow
to Investors

Sell After
~5 Years

  • Ability to hedge-in a robust base return, with substantial downside protection
  • Pursuing new financings in areas with little access to current capital markets
  • Pursuing financings at valuations supported by producing reserves and current cash flow
  • Non-marketed relationship deals
  • Niche transactions in the distressed and special situations space
  • Transactions where the majority of overall invested capital is returned through asset cash flow over a medium-term hold period

Transaction Size

Typical Fulcrum Investment Of

$10 – $25M

with exceptions

Transaction Values Typically Up to

$100M

for initial platform

Opportunity Set

Underserved space in lower middle market oil and gas finance

Capital intensive industry given asset heavy nature of the business

Large wave of M&A, debt maturities, and capital requirements on the horizon

Strategic situations where flexible capital solutions are differentiated and existing capital providers are too large and over-specialized

Denver is an underserved market for energy private equity capital relative to the number of oil and gas companies in the Rocky Mountain region

Geography

  • Top-tier oil and gas basins that are economic in a lower price environment
  • On-shore assets in North America
Current Areas of Operation

Other Key Criteria

Production and cash flow support valuation

Structuring downside protection through commodity price hedging, amortization mechanisms, covenant protections, etc.

Quality management teams

Creative deal structures

Potential for operational enhancements at the asset level