“The money’s out there, but anybody who ever says it’s easy to raise ….just hasn’t done it.” J.D. “Jakie” Sandefer III was continuing to explain his wildcatting philosophy which hangs on the power of money in your pocket.
As the chairman and president of Sandefer Oil & Gas Inc. said in this column last week, “About the strongest thing in this business is the power to commit. If you’ve got dollars and you see a good deal, you can move faster than the major companies.”
But after 23 years in the energy business, Sandefer admits wildcatting is a chicken-and-egg situation. To raise money, a new company must have a track record. To get enough holes in the ground to establish a track record, a company has to have money. That’s why a lot of small oil companies fail and that’s why during the last couple of formation years at Sandefer, the management has spent “75 percent of the time recruiting and 75 percent of the time raising money.”
Sandefer does his own fundraising. Why? “The kind of money we’re spending …It’s almost mandatory to do it on a one-to-one basis. The brokerage houses and investment bankers are not really designed to raise that kind of money. We’re talking to industrial and institutional corporations. It gets back to getting them in this conference room and telling them who we are and what we’re doing. We have to tell our story. It’s hard for somebody else to do it.