From the Minerals PE Webinar today via @TheOilCouncil:

90%+ of viewers feel PE has a place in minerals

Kafka (Encap) reveals they've spent about $2 billion on minerals between St. Elena, Piedra, Fortis, Pegasus, and OGX.

Wallis (NGP): They've turned to a cash flow focus.

Hochner (PEP): they've been active on 10-15 different acquisitions that haven't hit yet. It's been hard with cost of capital. They missed the 3-5 year frothy phase where flip opportunities existed. It's an asset class they really like. It's appropriate for PE.

(correction) 73% agree PE has a place in minerals. 5% disagree. 22% unsure. That unsure piece is quite interesting.

Tim Pawul (OGC): doing a great job hitting back. "most people don't believe PE is the right capital for minerals. defend yourselves."

Encap in response: you can argue that there've been times in the mkt where there's lots of capital chasing opportunity; if you're taking dev risk, geo risk, timing risk, etc. the capital required is going to demand a higher return. PE can play in that space.

Question: with companies being longer, PDP strategy, how do you incentivize management teams if there isn't that quick hit and exit?

Denham: acknowledge In a typical PE deal the mgt team is locked up and can't compete. Once the commitment is spent, we allow the parties to get paid through vesting while possibly going out and starting their own venture. It better aligns incentives.

Question: consolidation is a theme right now within the upstream side and it's starting to come towards minerals. please comment on consolidation in minerals.

Denham: consolidation doesn't have to be nasty. A lot of times these assets increase in value over time. Taking G&A off the table in the longer term helps everyone.

Tim: Josh Camp (Perpetual Production) said Private Equity is the best capital partner bc of a data advantage and scale being the name of the game. If you get scale you are starting to pick up the bits and the pieces and you become more of a yieldco vs. requiring local expertise.

Question: when you look at consolidation, a lot of your operated / non-op entities have dropdowns for royalties acquired. Have you ever looked at taking the dropdowns from the E&Ps directly into the mineral portcos?

NGP: we will try to avoid that.