Crude oil prices are now driven by financial flows and US$/FX trends in addition to fundamental supply/demand dynamics. Broader, sustained global demand in recent years, and the chronic annual reserve replacement shortfalls continue to support structurally higher prices and incentivise new exploration in more politically volatile, geographically extreme and geologically complex areas for conventional and non-conventional sources.

While natural gas pricing is now de-coupled from oil, and the curve is at historically low levels in many markets, we believe it likely that natural gas prices will revert to the mean in the medium term driven by high decline rates from some new, non conventional sources and growing demand from the power sector in OECD and developing economies. Natural gas is evolving as the key available, cleaner, lower carbon energy source, that will bridge the transition to a future of alternative energy.

In order to better serve the next phase of oil and gas development, Oil Field Services (OFS) players are rapidly consolidating to gain scale and investing in next generation efficiency technologies aimed at reducing costs of complex extractions, improving reservoir yields, and minimizing environmental impact.

Torch works with conventional and emerging E&P companies who are building production portfolios around specific strategies such as EOR, heavy oil/oil sands, tight/shale gas, coal bed methane and new, less explored on and offshore regions. With our background in IP centric businesses, we also work to develop and finance next generation technologies as well as introduce strategic opportunities to mid and large cap IOCs and OFS players looking for an integrated product/service suite, a technical edge and/or a step function change in specific segments of their businesses.

Torch’s strategic view on industry trends positions us to identify unique opportunities for specific private capital investors seeking direct or indirect oil and gas exposure, asset repositioning and optimization via M&A.