New York private-equity firm Apollo Global Management LP views the tremendous disparity in Btu value created by the oil and gas commodity price bifurcation as an investment opportunity for those with staying power, according to Sam Oh, a partner with the company.

“There is tremendous value here as long as you’re being realistic about the long-term (natural gas) forecast,” said Oh, whose realistic view is sub $6 to $7. “It’s certainly driving a lot of our investment decisions, but you have to have the capital structure that affords you the ability to ride out the cycles.”

Oh, sitting on a panel of energy M&A advisors, spoke recently at the Mergermarket Energy M&A and Financing Forum in Houston. Apollo is in the process of buying El Paso Corp.’s E&P arm, an 80% gas-weighted company, for $7 billion.

“We think there are structural and permanent shifts that are driving the value disparity, and we’re trying to capitalize on it,” said Oh.

However, companies that acquired assets in the past 24 to 36 months at higher natural gas valuations are “somewhat unfortunate,” he characterized. “That’s going to be a challenge. Those will probably be the first to hit the wall—and may create more opportunities.”

But don’t expect a wave of bankruptcies, said Osmar Abib, managing director and global head of oil and gas for Credit Suisse. Plenty of money is available for energy investment, and capital markets are thriving from extremely low interest rates. Opportunists waiting for natural gas levered small independents to fall are going to wait longer than they expect.

“The high-yield market is as strong as it’s ever been in my career,” Abib said. “That’s going to let a lot of these companies survive and restructure in a way that is healthy. Maybe they’ll have to recapitalize and get equity injections, but I don’t think we’re going to see a rash of bankruptcies in the U.S.”

Then again, he clarified, if natural gas remains weak for five years, “then there will be blood on the street.”

Oh said Apollo views a recovery in natural gas prices to occur no sooner than next year, but could trend up following a reset of gas storage after the winter season, combined with a period of almost nonexistent gas-development capex.

“Once the data is out, you’re going to see capex for gas development has fallen off a cliff.”

Robert F. Gray Jr., partner with energy M&A law firm Mayer Brown LLP, said SEC reporting rules stating public companies must drill proved undeveloped locations within five years to hold reserves on the books could move gas assets to market in the next two or three years.

“As we see a lack of development in these areas, you’re going to see a write-down in proved undeveloped locations, which is going to impact the stock value of these companies.

Gray notes specifically that Japanese companies have an appetite for North American gas assets, a response to the Fukushima nuclear accident in March 2011. Japan is the largest LNG importing country in the world.

“They are more aggressive, moving up the value chain as opposed to being passive, minority investors. They are now taking a greater interest in operating.”

Japanese companies are looking to partner with U.S. private-equity companies, he noted, not because they need to, but to validate the purchase decision. “The Itochu and KKR hookup is unprecedented,” he said, referring to the $7-billion acquisition of Samson Resources by an investor group led by KKR. Japanese E&P Itochu Corp. took a 25% stake.

North Korean and Chinese companies are also taking more interest in the U.S., he said, a “good omen” for the U.S. M&A market.

Nameer Siddiqui, managing director for Goldman Sachs, points to the C$1-billion Petronas/Progress Energy deal in Canada as to the value of natural gas in today’s M&A market.

“Why would a Malaysian entity be buying gas in Canada when they have gas reserves in own country and region? They fundamentally believe in the LNG viability of North American gas.”

Siddiqui said some NOCs steer clear of the U.S. and instead invest in Canada, not because of the regulatory regime, but due to America’s posture with certain sovereignties.

“Indians, Malaysians and Middle Eastern NOCs are extremely cautious about putting capital into the U.S. energy space. It inhibits their ability to do deals with countries like Syria, Sudan, Iran and others.”

For oil, the M&A market is global as international oil companies and NOCs seek reserves, and the amount of capital is “literally infinite,” Abib stipulated.

“They are acquiring reserves for strategic reasons. It doesn’t mean their price deck is completely crazy, but they have motivations beyond what a typical U.S. company looks at.”

These companies view weakness in natural gas and a slippage in oil prices as a huge opportunity to further accelerate an already strong move on the market, said Abib.

Apollo’s Oh said supermajors are still hungry for U.S. shale gas and tight oil.

“All the signals we’re hearing are that majors are coming back in. They want big positions that are meaningful. I wouldn’t be surprised to see another shale-oriented, growth company get taken out by a major.”