Jack McClendon

And you're dealing with wells where operating costs are higher, right?

We move more water, so I need more electricity per well to move more water.

Our operating costs are higher.

And so you've got to do a little bit more convincing on that cost discipline side when you're raising capital.

But what I would tell you is that the pockets of capital that I'm kind of talking to are going to be very different than the pockets of capital that the larger shale guys are talking to.

I mean, for the most part, the large shale companies are either publicly traded.

And so you're talking to people that invest in public markets or their large institutionally backed private equity capital.

Right.

So you have really kind of four to five large energy private equity backed firms, most of them in Houston and Dallas.

And, you know, they wield large sums of capital kind of in the nine, you know, nine to 10 figure range.

And for the most part, that's who's backing shale.

You've got to have scale now.

It's a consolidation game.

And yeah, it's just it's different from my company where we're largely kind of talking to family offices, alternative investment vehicles, you know, people who are looking to put smaller quantums of capital to work, you know, to kind of find a unique way to play the space.

Because really for these larger companies, it's the Permian or bust, right?

I mean, that's really kind of the story.

Yeah, no, that's a really good point.

I mean, you know, largely what I found is on the equity side, it is similar to traditional private equity, right?

But, you know, money is invested and then you get money back plus a rate of return and then you have a waterfall structure, which is based on return to capital.

And that can be, you know, either kind of based on an IRR basis or on an ROI kind of absolute return of capital.