Capital Allocators – Inside the Institutional Investment Industry

Striking Oil – CrownRock by Lime Rock Capital (EP.428)

26 snips
Jan 20, 2025
Join John Reynolds, Jonathan Farber, and J McLane from Lime Rock Capital as they share the breathtaking journey of CrownRock, which transformed a $96.5 million investment into a $12.5 billion sale. They discuss innovations in vertical and horizontal drilling, key threats to the business, and the critical 'forever hold' mindset that fueled incredible capital growth. The conversation also touches on navigating crises like the global financial crash and the 2020 pandemic, along with the strategic choices that led to CrownRock's historic acquisition by Occidental Petroleum.
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ANECDOTE

Lime Rock's Origin Story

  • John Reynolds, Jonathan Farber, and J McLane share their backgrounds and the formation of Lime Rock.
  • Inspired by the Canadian energy sector's success with smaller, focused companies, they aimed to replicate this model in the US.
INSIGHT

Lime Rock's Investment Strategy

  • Lime Rock's strategy focuses on backing smaller, entrepreneurial energy companies.
  • They believe this focus leads to operational excellence and superior returns on capital.
ANECDOTE

CrownRock Investment Thesis

  • Lime Rock's initial investment thesis for CrownRock involved exploring the Gothic Shale and the Wolfberry play.
  • While the Gothic Shale venture failed, the Wolfberry play proved highly profitable.
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