NGP

"Upon arriving, the lawyers’ office felt like a morgue. I met Nick, Mike, their key lieutenant Ted Gazulis, their lawyers, Hovey Kemp and Jim Piccone, and several other executives of the company. They were dejected, watching this deal they had worked so hard on wither on the vine. There was a lot of frustration that a terrific opportunity for the company and its financial partners would fall apart because of an eleventh-hour surprise from Goldman Sachs. I went on to offer my thought that HS was at a disadvantage by committing to a deal with Amoco before having all the money in hand. This allowed Goldman Sachs to push the company up against one deadline after another, resulting in a real negotiating handicap. Having talked with Richard and sensing that the likes of John Snyder wanted in, I felt this transaction had so much value that we couldn’t allow it to fall apart because of Goldman Sachs. I felt that our downside would be covered, so moving forward would be a judicious risk to take. I have to say, though, that Ted Gazulis remembers it differently. He recalled, “I saw black smoke coming out of your ears. You were hopping mad that Goldman was going to either steal or torpedo the deal!” Maybe his recollection has some merit to it. Anyway, I told the team that NGP was prepared to cover the purchase price of the deal and then work out a refinancing without the deadline time pressure on all of us. I put on my best face and said, “Instead of putting up $ 15 million, how about NGP speaks for the full $ 30 million, so we can close it, and then we can work out a refinancing plan without the deadline pressure?”"

"On November 16, 1988, the deal became official. In the final version, probably some legal associate took the brackets off, and—poof—our partnership had a name: Natural Gas Partners, or NGP, as it would be called. I came to appreciate later on that not a lot of thought went into naming things in the Rainwater world. Richard thought it was a waste of money to hire naming experts. The original investment partnership was called Bass Investment Limited Partnership. And the general partner of our partnership was named G. F. W. Energy, LP. Those letters stood for Greenwich Fort Worth—the names of the cities where the partnership’s offices would be located."

"Early in 1989, I went on the payroll of NGP even though I was still a student. David Albin was on board as the leader of the team based in Greenwich. Working there, too, was a former managing director at First Boston (now Credit Suisse) named R. Gamble Baldwin. Late in the summer, around the same time that the first Equitable meeting was coming together, Richard had called Gamble after reading an Institutional Investor magazine article that rated him the number-one analyst covering the natural gas industry. “How would you like to retire from the banking game, Gamble?” Richard had asked on a cold call to him. “I have these guys, and we may get this money, and I think they’ll need an adult around them.” I think Richard just liked the shock value in cold calling folks."

"One of the early transactions that NGP completed in 1989 was participating with the entire Fort Worth office in a distressed debt play to wind up taking control of one of the largest offshore drilling rig owners in the world, the Penrod Drilling Company. This deal was originated by Peter Joost and Richard Rainwater through their relationship with Carl Thorne. Carl ran Energy Service Company, or ENSCO, in which Richard and others in our office were large shareholders."