Our survey reveals PE funds are aiming to raise more money to invest in the industry.

However, we also found a PE community still wary of current market volatility and seemingly hesitant to invest, waiting to see if the downturn has hit bottom — an understandable stance, with respondents more inclined to start investing in early 2017.

The valuation gap between buyers and sellers — the “bid-ask spread” — has also persisted into 2016. This is a result of buyers expecting bargains at a time when sellers are loath to part with quality assets at low prices, or, alternatively, buyers and sellers having very different views about the future of commodity prices.

This, in turn, may give rise to more innovative deal structures, as firms test the waters with joint ventures, strategic partnerships, or become more creative with hybrid equity type investments. We see PE firms potentially having to over-equitize as banks’ lending appetite may be more restricted.

Amid cost-cutting and the servicing of massive debt accumulated during the boom years, the oil and gas industry’s need for operational and growth capital is as large as ever. And PE is well-positioned to fill the gap.