If you believed the headlines from 2015 through 2020, you might have concluded that oil and gas investing was finished — a relic being steadily dismantled by the twin forces of ESG pressure and the energy transition. The reality that has emerged since is considerably more nuanced, and for investors who stayed the course or reentered at the right moment, considerably more rewarding.
At Commonfund Forum 2026 Dan Connell, Co-Head of Real Assets and Sustainability at CF Private Equity moderated a discussion on natural resources investing with Wade Webber, Managing Director of Cresta and Jackie Haney, CEO and Managing Director, UnionRock Partners. Following are key takeaways from this session.
A Market Transformed: Natural Resources Investing
The Industry's Transformation
The U.S. upstream energy sector looks almost unrecognizable from a decade ago. Successive shocks — over-leverage, OPEC price wars, COVID — wiped out the weak and left behind a leaner, more disciplined industry. Balance sheets are clean, cash flows are strong, and operators are focused on returning capital rather than chasing growth at any cost.
The Capital Retreat Created an Opportunity
ESG pressure and poor returns in the 2015–2020 period drove a mass exodus of institutional capital. Public energy IPOs entered a "nuclear winter." In midstream alone, the number of public companies compressed from 75 to 30 while market cap held flat at ~$500B — pushing buyers upmarket and leaving the middle market underserved and attractively priced.
The Lower-Middle Market Opportunity
Both Union Rock and Cresta have built strategies around this gap. By focusing on smaller transactions in less-covered corners of the market, they seek to face less competition, pay lower entry multiples, and move faster than larger peers. The goal is earlier capital deployment and stronger cash distributions back to investors.
Commodity Risk Is a Management Problem, Not a Dealbreaker
Experienced managers have well-developed tools for navigating price volatility — disciplined hedging programs, conservative underwriting, and contract structures that push volume risk back to producers. The key insight: commodity price is one variable among many, and it can be managed.
AI Is Reshaping the Demand Picture
The scale of new power load being requested across U.S. energy grids is extraordinary relative to historical norms. For natural resources investors, this translates into sustained natural gas demand, new infrastructure buildout opportunities, and the potential to unlock resource-rich regions — like Appalachia — that have long been constrained by limited takeaway capacity.
The Next Opportunity Is Already in the Ground
Rather than searching for new frontiers, the most compelling near-term opportunities may lie in what already exists — optimizing legacy export infrastructure and revisiting acreage developed quickly in the last cycle using today's far superior drilling and completion technology. The best place to find oil, as the saying goes, is where you found it before.
