Asset Transactions Booming in Oil & Gas Sector
A total of $75 billion in unconventional oil and gas assets changed hands last year according to a report on MarketWatch citing a study by international consulting group IHS. That’s a record high for shale gas and other non-conventional hydrocarbon…
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Much of the activity has taken place in the US and Canada, where a stable political environment and huge and easy-to-reach shale plays have boosted the demand for a piece of the action.
MarketWatch also noted the decline in total oil & gas transactions though:
Unconventional oil and gas deals represents 48% of total world-wide merger-and-acquisition spending in exploration and production assets last year, according to the study. However, total global upstream merger and acquisition transaction value, including corporate mergers, fell 30% from an all-time high in 2010, which was driven by massive asset-divestiture programs.
The IHS study also said that small oil & gas exploration and production companies that have claimed large tracts of exploration areas may not have access to the capital necessary to develop the fields. In such cases, these small-cap companies make enticing takeover targets for the supermajors and national oil companies that have had trouble increasing reserves organically.
Paul Ausick
Contact [email protected] for any questions or corrections.
Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
