Wall Street trying to tap into a new gusher

Searching for growth in a tepid economy, private-equity firms are zeroing in on the U.S. oil patch, The Wall Street Journal reports. Private-equity firms completed $24.8 billion of energy deals last year—nearly triple the $8.5 billion in 2010—while the value of all deals last year rose just 17%, according to data-tracker Preqin. Deal makers are excited because advances in drilling techniques such as horizontal drilling and hydraulic fracturing—more commonly known as fracking—have made it easier to extract oil and natural gas from shale and other rock formations, creating an opening for private-equity firms to place big bets in a capital-hungry business. Some early investors already have extracted billions of dollars of profits. Energy-related private-equity investments scored gains of more than 30% in each of the past two years and have beaten industry averages for 12 of the past 14 years, according to Boston-based investment consultant Cambridge Associates. Check out the full story here (subscription required).