The energy industry may be the best place to be these days, if you are a new company searching for capital to get started.That was the message given by a panel at Hart’s Energy Capital Forum held in Houston to an audience of energy executives.

“There is a constant flow of investment opportunities to invest in oil and gas exploration and development plays,” says Jim Wicklund, energy portfolio manager at Carlson Capital LLC. “There are no shortages of opportunities.”

Still, he said, those opportunities can sometimes take strange shapes. Wicklund says he recently saw a Haynesville shale lease on sale on an Internet site for $15,000. Despite quirky developments such as that, “the long term outlook is good” for finding capital opportunities, Wicklund says.

The market for E&P companies is very large, he says. John S. Herold lists 6,157 private E&P companies in the U.S. and Canada “and that doesn’t even count the large number of like companies found in Europe and South America.”

Just how hot the market is can be judged, he says, by looking at the number of transactions in the $5 million to $20 million range. Since 2005, there have been 960 and most E&P stocks have doubled this year.

Driving this engine now is a positive outlook for both oil and gas by virtually all investors. Futures markets mirror that belief and returns are very strong even in lower commodity range.

The search for capital can take many different routes, says John Schaeffer, managing director of diversified energy with GE Energy Financial Services. That route can include bank debt or private equity.

Schaeffer says GE’s investment guidelines include making sure they have the right general partner, the proved reserves are in the “shallower end of the risk pool,” no “cap” on capital spending and a “heads up, side-by-side investment going in.” It’s a strategy that works, he says.

Since 1981, GE has enjoyed $3 billion in partnership equity that includes 8,200 wells and a production rate of 21,350 barrels of oil equivalent per day. The company’s gas portfolio includes $1.5 billion reserve-based equity with 46% being oil and 54% gas.

One method of financing that is getting more attention now is the Special Purpose Acquisition Companies – SPAC.

“SPAC offers a viable alternative to the more traditional initial public offering,” says Ronald D. Ormand, chief executive of Tremisis Energy Acquisition Corp. He explained that a SPCA is an investment vehicle that allows public investors to invest in areas sought by private equity firms. SPACs are shell or blank-check companies that have no operations but that go public with the intention of merging with or acquiring a company with the proceeds of the SPAC's IPO.

He said that in 2005, SPAC’s accounted for $2.1 billion in deals, $3.2 billion in 2006 and $11 billion in 2007. “An SPAC provides near time capital to companies,” Ormand says.

Another avenue is Angel Investors or angel funding, says James C. Row, chief financial officer for Extex Operating Co. Inc.

An angel investor is an individual who provides capital to one or more startup companies, Row says. The individual is usually affluent or has a personal stake in the eventual success of the venture. These investments, Row says, are characterized by high levels of risk and a potentially large return on the investment.

“Trying to raise money in any business can be difficult,” Wicklund says. “But the energy industry is the best place to do it right now.”