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Oil & Gas Mergers and Acquisitions A lot of talk, much more action
Deloitte Center for Energy Solutions
Table of contents
Introduction by Deloitte’s Vice Chairman, Oil & Gas 1 Strong recovery in mergers and acquisitions expected to continue Industry Overview Industry Overview Exploration & Production Exploration & Production Midstream Midstream Oilfield Equipment & Services Oilfield Equipment & Services Refining & Marketing Refining & Marketing Summary Summary 2 4 6 8 10 13
1 2 4 6 8 10 13
Source: IHS Herold 2
and exciting trends that will shape transaction activity in the future. Midstream transaction activity has picked up.deloitte. Refineries improved their profitability in 2010. The openness of the North American markets to outside investment and the long-term potential of the region’s shale and oil sands fields attract investors despite recent weakness in natural gas prices. These entities are separate subsidiaries of Deloitte LLP. Companies are focusing on extending their geographical reach and building up infrastructure to serve the new unconventional sources of gas supply. Gary Adams Vice Chairman U. as domestic and international buyers of all types continue to be drawn to unconventional assets. Deloitte’s M&A leaders also weigh in with insights on underlying fundamentals. M&A 2010 Review and 2011 Outlook 1 . While E&P activity in the Gulf of Mexico in 2010 continued to be troubled by a cloudy regulatory outlook. driving deal count and value back to pre-recession levels. particularly in the exploration and production (E&P) segment of the industry. technological advancements have helped fuel deepwater deal activity. searching for reserve replacement and technological expertise. we anticipate an active transaction market to continue as stronger players. The recovery in mergers and acquisitions (M&A) that we began to see in the first half of 2010 continued throughout the year. areas of particular strength and weakness. but overall M&A activity in 2011 is likely to lag behind other. That should translate into continued consolidation as midstream providers increase their capacity to make new investments. Right now. Our M&A 2010 Review and 2011 Outlook contains more information about the past year’s deal-making activity and prospects for 2011 in each energy industry segment. were actively snapping up deepwater assets in South America. and we expect it will continue to be strong through 2011. Just as technological innovation has opened up vast resources to development in North America. Deloitte Tax LLP. stronger segments of the oil and gas industry. Underpinning this renewed interest in energy assets has been the strength in commodities markets. Looking ahead. Private equity players and international buyers attracted to depressed prices may make some strategic acquisitions in this area. find buying opportunities among smaller companies unable to ride out the weak market for natural gas. We expect that trend to continue. While the largest deals may have already taken place. which will mean greater deal activity in oil and gas. North America remains the center of E&P transaction activity. buyers.S. but overcapacity continues to be a drag on asset valuations in this segment. and Deloitte Financial Advisory Services LLP. Oil & Gas Deloitte LLP As used in this document. oilfield service is expected to continue to be an active area for deals in 2011 as large oilfield service players continue to seek access to cutting-edge technologies and new markets. “Deloitte” means Deloitte & Touche LLP. and we expect deepwater reserves to be an area of continued excitement and buying interest in 2011.Strong recovery in mergers and acquisitions expected to continue The year 2011 is shaping up to be a very strong one for energy industry deal-making activity.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. particularly from China. Deloitte Consulting LLP. The same drive to serve the high-potential unconventional and deepwater markets fueled some very large transactions in the oilfield services segment in 2010. Please see www.
with a strong floor under it. “and they are pursuing oil and gas resources in practically all corners of the world. where prices have weakened due to successful drilling programs. as fears of a “double-dip” recession have faded. processing.” says Dillavou. we’ve got oil prices in the $100 range. “Making investments when prices are low is a good strategy. and other infrastructure. Our analysis has excluded several transactions between affiliated companies to provide a more accurate picture of M&A activity in the sector.” Chinese acquisitions of deepwater assets in Brazil and conventional mature assets in Argentina led to a jump of nearly 350% in transaction value in South America. While the majors and National Oil Companies (NOCs) are focused on resources. 2 Note: M&A activity examined in this report represents mergers and acquisitions involving oil and gas companies between first quarter 2008 and fourth quarter 2010 with values greater than $10 million. Source: IHS Herold .” says Jim Dillavou. “Private equity players and the large corporations have plenty of cash for deals. “Merger and acquisition activity continues to recover from the low point reached in the fourth quarter of 2008 through the first half of 2009. principal at Deloitte Consulting LLP. including transactions with no disclosures on reserves and/or production.” says Trevear Thomas. transactions have been strong and they continue on an even keel. “Right now.” Financials and fundamentals within the industry are particularly strong. Deloitte’s methodology takes a deeper look into the M&A transaction data. thanks to rising oil prices. “We’re seeing a handful of new transactions each day. storage.” says Jed Shreve. “These players are in it for the long haul. that is not stopping the major oil and gas companies from snapping up North American gas assets to further diversify their energy portfolios. principal at Deloitte Financial Advisory Services LLP. North American gas is a different story. “Since then.” says Dillavou.” Buyers include super majors looking for high-potential assets. partner at Deloitte & Touche LLP. and plenty of money is still on the sidelines.” A recovering worldwide economy supports the industry’s strong deal activity. particularly in Canada. “The Chinese oil and investment companies are making long-term investments in North America. the Chinese and other international players.Industry overview A broad recovery in transactions to pre-recession levels The long-term potential of unconventional and deepwater energy assets attracted buyers of every sort back into the oil and gas M&A market in 2010. and that price seems very real. and private equity funds. Stronger commodity prices and credit markets further support continued M&A activity. private equity investors remain active in all segments of the industry. However. pushing the overall industry deal count to pre-recession levels. including transportation.
S. “It’s interesting how. North America’s deal count share rose from 54% to 68% of the worldwide total.“ 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Asset value Corporate value Total deal count (RHS) Source: IHS Herold M&A 2010 Review and 2011 Outlook 3 . deal count in the industry rose 12% in 2010 to 443. Now. about ten years ago. M&A activity was concentrated in E&P.S. with acquisitions in North American shale and oil sands assets leading the way.“We’re seeing a handful of new transactions each day. while value increased 25% to $227 billion.” – Jed Shreve Principal Deloitte Financial Advisory Services LLP Oil & Gas M&A deals by value and count (In $ billions) 80 70 60 50 40 30 20 10 0 0 50 100 150 (count) 200 Overall. New exploration and recovery technologies have opened up vast unconventional resources to production in the U. more than 30 liquid natural gas (LNG) regasification import terminals were proposed for construction in this country. as we were running out of natural gas supplies. discussions are taking place to build liquefaction plants to export natural gas out of the U. and plenty of money is still on the sidelines.. transforming the industry’s transaction market and investment plans. That’s a 180 degree transformation in a decade. Shreve marvels at how domestic industry prospects have changed in just a few years.
Thomas calls it a “white-hot market. not to mention North America’s openness to outside investment. Since the terms of most lease agreements encourage the E&P companies to quickly establish production from their leases. Stable and rising oil prices. with over 325 deals worth $175 billion.S. “The pressure among major oil and gas companies to build their reserve/replacement ratios is strong. particularly China and other Asian countries who are seeking to secure energy assets and access to new technologies through joint ventures with U. long-term play. partners. creating an active market. it’s increasingly hard to build a reserve ratio of 100% or over when the NOCs retain so much control of worldwide supply. while the smaller players are selling some of their holdings. and more favorable credit markets were all factors in the strong and steady pace of M&A activity during 2010.” says Dillavou.” Buyers included foreign players.Exploration & Production North America leads the way as transactions rebound The upstream transaction market staged a strong rebound to pre-recession levels in 2010. often for capital to develop other properties in their portfolio.” North American deal count share rose sharply as a percentage of worldwide E&P transactions from 58% in 2009 to 73% in 2010. a recovering worldwide economy. divesting over $30 billion in E&P assets. So the majors are making lots of investments in shale properties right now.” says Thomas. “Especially for the super majors. some weaker companies are open to selling.” Upstream M&A deals by value and count (In $ billions) 80 70 60 50 40 30 20 10 0 1Q08 Asset value 2Q08 3Q08 Corporate value 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 20 80 (count) 120 100 60 40 0 Total deal count (RHS) Source: IHS Herold 4 . an increased level of drilling required to hold these leases has contributed to near-term overproduction. But the biggest factor in new acquisition activity was interest in unconventional E&P assets. Although the super major oil and gas companies were net sellers of properties in 2010. “Many property owners have more acreage than they can afford to develop. Investors continue to be drawn to the vast potential of the region’s shale and oil sands fields and the technology and techniques perfected to economically develop these fields. “Shale development is a capitalintensive. And because of depressed natural gas prices. these companies were very active in buying up North American shale and oil sands assets as well.
“As NOCs acquire the technology they need.” says Thomas. “We feel the next wave of ventures and interest will be in deepwater. “We don’t see the U. this is the next M&A frontier. South America attracted nine deals of more than a billion dollars each. with buying opportunities for larger players who can wait out the uncertainty. that may change. we believe. “The industry itself is also trying to develop solutions to the regulatory issue.” says Thomas. In the U. it remains to be seen if the pursuit of offshore production is a viable option for a small company. the controversy over environmental impacts from fracturing could complicate future shale property transactions." “The pressure among major oil and gas companies to build their reserve replacement ratios is strong.” says Shreve.S.” says Thomas. as growth-focused companies sold mature assets and shifted capital to new deepwater frontiers in Brazil and Venezuela. but in the meantime.S..” Some offshore companies are exiting that business completely to focus on onshore activities.S. “As the industry is forced into a ‘wait and see’ posture regarding permits. “We should continue to see consolidation among smaller E&P operators in the Gulf. should continue to focus on deepwater and unconventional energy sources. deals are still happening.” U. offshore regulatory environment improving over the next several months.” says Thomas.Looking ahead. Future deal-making activity. shale fields were not the only new sources of production to attract buying interest in 2010. “Meanwhile. so the industry is betting that the regulatory impact will be manageable. BP’s recent announcement of a joint venture with Russia’s Rosneft to explore deepwater sources in the Arctic is one example of the type of collaboration the industry is trending toward. “Super majors have the technology to explore untapped resources in places where NOCs may not.” – Trevear Thomas Principal Deloitte Consulting LLP Source: IHS Herold M&A 2010 Review and 2011 Outlook 5 . the “permit-orium” on deepwater drilling in the Gulf has significantly dampened activity. One major buyer recently inserted a clause into its purchase agreement for shale properties that allows the buyer to walk away from the deal should regulatory prohibitions against fracking pass.
S. “New developments of shale fields mean the need for more pipelines and other midstream infrastructure. These transactions have been increasing the participation in energy-related MLPs back to pre-recession levels. 77% of agreements were related to liquid pipeline and gas gathering and processing businesses.” – Jim Dillavou Partner Deloitte & Touche LLP and large MLPs were active buyers of midstream assets in the U.” says Thomas. At the same time. especially with shale-related assets. Of the midstream deal count in 2010. and we’re seeing lots of transactions in this area. “Investors see the potential in the industry’s need for new capacity. focusing on gaining access and providing infrastructure to get unconventional sources of natural gas supply to the markets. 15 10 5 0 1Q08 2Q08 3Q08 4Q08 Gas pipelines 1Q09 2Q09 3Q09 4Q09 Tankers/others 1Q10 2Q10 3Q10 4Q10 Diversiﬁed Liquid pipelines Gas gathering/processing Source: IHS Herold 6 .” says Dillavou. businesses suitable for MLP formation and general partner interests in MLPs are attractive to private equity firms and other institutional investors. Recovering capital markets allowed MLPs to raise significant funds in 2010. rose 22% in 2010 after rising 52% in 2009.Midstream Upstream interest in shale drives midstream activity Over the past several years. But transaction activity in the midstream market has changed course somewhat. Midstream companies are actively trying to extend their reach into strategically attractive regions. a composite of 50 energy MLPs. The Alerian MLP Index. Master limited partnerships (MLP) are still the vehicle of choice for midstream operations. Deal count by midstream businesses (count) 20 “New developments of shale fields mean the need for more pipelines and other midstream infrastructure. and we’re seeing lots of transactions in that area. diversified companies have split off pipeline assets to monetize their cash-generating value.
Also.“We’ve seen a trend this past year toward companies reacquiring the general partnership interest in MLPs. Continued investment in shale by upstream companies and demand for natural gas liquids from the petrochemicals industry should help maintain demand and profitability for the gas gathering and processing businesses.” Looking ahead.S. “Companies want to exercise better control over their cost of capital. “The largest potential is with the industry’s need for new capacity. with Standard & Poor’s forecasting earnings growing faster than U. that may mean further consolidation among midstream operators so that they can have the capacity they need to make these investments.* A rise in shale gas production will likely increase demand for additional storage capacity in the U.” says Thomas. GDP in 2011.” Midstream deal count by selected regions (count) 20 15 10 5 0 1Q08 2Q08 3Q08 4Q08 Europe 1Q09 Canada 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 United States * Source: Standard & Poor’s: Oil & Gas Storage and Transportation – Sub-Industry Review Source: IHS Herold Globally diversiﬁed Former Soviet Union M&A 2010 Review and 2011 Outlook 7 . prospects for pipeline and terminal operators look bright. the possibility of tax rule changes are pushing some MLPs to tuck the general partnership interest back under the corporate umbrella.” says Shreve.S. “New pipelines will be needed to serve shale production areas.
” he says. “We saw some major acquisitions in the second half of 2010. accounting for 25% of total deal value in 2010. involved companies with nationwide operations. Oilfield Services M&A deals by value and count (In $ billions) 20 Most deals in the U.” says Shreve. “It’s a hot space to be in. “The big factors in these transactions are acquiring technological expertise and providing a wider array of services to customers. with lots of opportunity. cased hole stimulation. and that activity is extending into 2011. middle-tier players to continue. and we’ll continue to see more of those. (count) 40 35 15 30 25 10 20 15 5 10 5 0 1Q08 Asset value 2Q08 3Q08 Corporate value 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Total deal count (RHS) 0 Source: IHS Herold 8 . the major oilfield service companies are responding by expanding their geographical reach and technological expertise. “Major players are looking for companies that can deliver the innovative drilling technology required for shale extraction.5 billion. primarily as sellers. As E&P players increasingly focus on service-intensive sources in North America and deepwater sources abroad.S. and mud logging should continue to attract buyers’ interest. Private equity firms divested assets worth approximately $7. “We may have seen the last of the megadeals.” Companies with niche expertise in pressure pumping. but transaction value during the year more than doubled to over $30 billion.” says Dillavou. “Access to North American technology is driving the interest in oilfield service acquisitions.” says Dillavou.Oilfield Equipment & Services Need for service intensity drives activity The number of deals in the oilfield service segment remained near its five-year 2009 low in 2010. especially in shale gas regions.” Thomas looks for activity among the smaller. “But the large companies are making lots of smaller transactions. as the largest companies in the industry made major acquisitions. coiled tubing.” Private equity investors were active in the oilfield services market in 2010.
acquiring companies with global reach and technological expertise to match demand. major oilfield service players are following their international customers into deepwater frontiers. While the transaction value of offshore services acquisitions is still below the 2008 peak. Source: IHS Herold M&A 2010 Review and 2011 Outlook 9 . nine of the top 10 acquired oilfield service companies had worldwide operations. with the ability to provide unique and cuttingedge technologies to the increasingly complex business of extracting energy assets. fueled in part by two major acquisitions in offshore services in the second half of the year. as acquirers look to serve the new deepwater markets offshore in Africa. A potentially critical opportunity for the largest oilfield service companies is the option to collaborate directly with resource-rich NOCs and sign service contracts that bypass the international oil companies. and South America. The big factors in these transactions are acquiring technological expertise and providing a wider array of services to customers.“We saw some major acquisitions in the second half of 2010.7 billion.” – Jim Dillavou Partner Deloitte & Touche LLP Just as they are extending their reach onshore in North America. large oilfield service players can engage with the NOCs as service providers. and that activity extended into 2011. Both transactions involved major players adding to their deepwater assets. For all of 2010.” says Dillavou. “While it’s become increasingly difficult for the major oil companies to acquire lease agreements internationally to develop reserves. Asia. it jumped sharply over the previous year in 2010 to $6.
As a result. Rosneft. refining and marketing M&A activity dropped from 10 in 2009 to only two in 2010. “We may see a trend toward more carve-outs. and plants are now operating at high utilization rates. Activity picked up in 2010. In the U. and several refineries remain on the market.Refining & Marketing Still a buyer’s market Refining & Marketing M&A deals by value and count (In $ billions) 6 (count) 12 5 10 4 8 3 6 2 4 1 2 0 1Q08 Asset value 2Q08 3Q08 Corporate value 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Total deal count (RHS) 0 The strengthening world economy has meant better conditions for refiners. although some large deals in the fourth quarter of 2010 by OMV AG. In Europe. the brighter near-term fundamentals are overshadowed by the long-term likelihood of overcapacity in the major motor fuels markets of the Organisation for Economic Co-operation and Development (OECD). Yet.S..” – Trevear Thomas Principal Deloitte Consulting LLP The refining and marketing area continues to be a buyer’s market. buyers have been seeking refineries with strategic advantages. refiners are benefiting from a low cost source of energy.S.” says Shreve. Source: IHS Herold 10 . “The refiners have been profitable in recent months. and Petrobras brought the total value of refining and marketing deals for the year close to 2009 levels. With low natural gas prices.” says Shreve. Private equity firms are also picking up assets as the super majors and independent refiners shed retail assets and refineries. "Weak natural gas prices have also benefited refiners. Total 2010 deal count fell from 32 in 2009 to just 19 in 2010. and buyers consist primarily of opportunistic investors operating in the U. the number of transactions fell for the third consecutive year. such as competitive positions in niche markets or operations located near the acquirer’s existing plant.
the uncertainty of future legislation and regulation continues to make for a difficult investing environment.Overcapacity will continue to be a drag on the M&A market in 2011.” Dillavou agrees: “The fundamentals of the refining business in the developed world remain a big long-term question mark. We expect private equity players to remain active in the market.” says Dillavou. however. “But buyers are still scarce and sellers are anxious. “We didn’t end up with carbon legislation in 2010. most acquirers will be opportunistic.” Source: IHS Herold M&A 2010 Review and 2011 Outlook 11 .” says Thomas. as the industry outlook is weak. “The good news for this sector is that changes in government policy and regulation are moving more slowly than had been anticipated last year. and there have been no drastic changes in EPA regulations as of yet. “We may see a trend toward more carveouts.” Given that.
Refining & Marketing deal count by selected regions (count) 20 15 10 5 0 1Q08 2Q08 Asia 3Q08 Europe 4Q08 1Q09 2Q09 Africa 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 United States South America Middle East Former Soviet Union Biofuels M&A deals by value and count (In $ millions) 2500 (count) 10 2000 8 1500 6 1000 4 500 2 0 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 0 Value Asset value Corporate Value Corporate value Total Deal count (RHS) deal Count (RHS) Source: IHS Herold 12 .
particularly in the E&P segment of the industry. Continued shale field development is expected to increase the need for more pipelines and other midstream infrastructure – an area already active with many transactions. service companies are beginning to see more activity as they acquire technological expertise to provide a wider array of services to customers. stronger commodity prices and credit markets continue to support M&A activity as private equity investors and large corporations have plenty of cash for acquisitions. driving deal count and value back to pre-recession levels. We expect this trend to continue in 2011. The industry outlook for refining and marketing is more opportunistic given improved crack spreads. North America continues to lead the way as transactions rebound in the upstream space. Source: IHS Herold M&A 2010 Review and 2011 Outlook 13 . Having hit a five year low in 2009. resulting in greater deal activity in oil and gas. A recovering worldwide economy.Summary Rebounding with cash in hand The recovery in M&A transactions that began the first half of 2010 continued throughout the year.
com +1 713 982 4761 For more information about the Deloitte Oil & Gas Group and the Deloitte Center for Energy Solutions.com +1 713 982 4879 Trevear Thomas Deloitte Consulting LLP Houston email@example.com +1 713 982 4160 Jim Dillavou Deloitte & Touche LLP Houston firstname.lastname@example.org/energysolutions. visit us at www.com +1 713 982 2137 Jed Shreve Deloitte Financial Advisory Services LLP Houston jshreve@deloitte. please contact a Deloitte Oil and Gas professional: Gary Adams Deloitte LLP Houston email@example.com +1 713 982 4393 Jason Spann Deloitte Tax LLP Houston jspann@deloitte. 14 .For more information.
M&A 2010 Review and 2011 Outlook 15 . that is about two percent of capacity in a sector where closures are treated as a costly last resort. This article describes how boards and management can adopt a disciplined and structured approach and embed HS&E risk identification and management into their organizations’ strategy.deloitte. industry analysts. investors. The health. Deloitte Center for Energy Solutions To receive any of these papers and view all of our new thought leadership.S. implications of China's appetite for fossil fuels. visit www. and new owners and perspectives.com/energysolutions. balance sheet strength. boom in unconventional resources. new regulations. and higher insurance costs. once a company decides to move forward. and the public. allocate resources.Open for Business? Despite the end of the moratorium on deepwater drilling in the Gulf of Mexico.Current thought leadership 2010 Deloitte Oil & Gas Conference Summary Report The November 2010 conference with the theme The Road Ahead for Energy addressed the global economic outlook for oil and gas. This article highlights how effective risk management can help an oil and gas company to better prioritize activities. the favorable environment for investment and M&A. Many may not be ready to commit to these new realities of doing business and continuing operations in the Gulf. Oil and Gas Reality Check 2011: A Look at Ten of the Top Issues Facing the Oil Sector This report is based on in-depth interviews with clients. and risk management capabilities. safety. and governance structures. operations. Now the question is. and capital investment barriers. What happens next? The short answer is that it depends on how many refineries are closed and how long that takes. there are likely three scenarios described in this paper: rapid rationalization. and enhance its ability to achieve the desired objectives for many and/or most M&A transactions. Looking at the predicament. Costs to continue operations could increase due to permitting delays. attention has turned to the longer-term effects of this event for the oil and gas industry. refineries. there appeared to be a striking reaction to the industry: Oil companies said they would permanently close three U. natural gas. They are expecting more effective management of the risks involved in an inherently risky industry. capable of processing 400. and senior energy practitioners from Deloitte member firms around the world. and environmental (HS&E) practices of oil and gas companies have come under intense scrutiny of regulators. Learn more by reading the 2010 Deloitte Oil & Gas Conference Summary Report After the Spill: Oil and Gas Leaders Confront the Strategic Challenges Ahead With the oil spill in the Gulf of Mexico under control. and alternative energy. future for downstream. An even more dramatic impact lies in the new price of risk. it should consider the need to incorporate risk and risk management into every phase of the M&A life cycle. The Gulf of Mexico . Changing Times: What’s Next for Refiners? During the depths of the recession. M&A Transactions in a Risk-Intensive Marketplace: Implications and Opportunities for the Oil and Gas Industry Whether or not now is an optimal time for an oil and gas company to consider engaging in M&A activity depends on its strategy.000 barrels a day of crude. lingering overcapacity. oil and gas companies are facing new realities in the Gulf and must determine their path forward. However.
Current thought leadership (continued) Show Me the Money: Private Equity’s New Role in Shale Gas Infrastructure Development of shale gas resources has led to significant volumes of natural gas production coming online in the areas of the United States where midstream infrastructure assets are still immature. Sourcing Critical Oil Field Services for Shale Plays in a Tightening Supply Market Oilfield services markets are tightening for onshore unconventional resources. based on the healthy rise in deals so far this year. two businesses truly have merged. This article explores the shifting dynamics between exploration and production. and how new partnerships can support shale growth. 16 . Deloitte Center for Energy Solutions To receive any of these papers and view all of our new thought leadership. especially in new regions such as the Marcellus. Buying Into Change: Recovering. private equity. traditional midstream MLPs. and national oil companies. at its farthest reaches and from bottom to top. and creating enhanced roles for E&P supply management organizations. The report also discusses the rapid rise of natural gas exploration and production in unconventional formations on shore. it is a new normal as the result of what the financial markets and industry have gone through over the past two years. Sustainability and M&A As the M&A market continues to ramp up in many industries. and the subsequent response by independents. New Partnership Rules Shake up Shale: Price Volatility Fosters Changing Business Models for Gas Players Natural gas exploration and production development has changed significantly with depressed prices. the development of alternative supply sources. The report includes views and perspectives from Deloitte’s oil and gas M&A leaders on the industry’s activity and what that says about how business is changing.” the last of the legal documents is signed and the combined financial statements change from “pro forma” to “actual”? Or does it take place after personnel reductions and changes are complete and a new management team is in place and working together? These are clear signs of change. do two companies become one organization? Does it happen when the “deal is done. after a major merger or acquisition. large majors. within the organization. and recent man-made disasters are compelling business leaders to think longer and harder about the potential sustainability implications – both positive and negative – of planned mergers or acquisitions. Transform or Integrate? Choosing the Right ERP Strategy During Oil and Gas Company Mergers and Acquisitions At what point. Expanding government attention. including the pursuit of strategic partnerships with service providers. Yet. lean structure and strategic relationship with suppliers. greater media exposure of sustainability issues. issues of sustainability are higher on the radar for acquiring companies.com/energysolutions. Redirecting in Oil and Gas The 2010 mid-year version of the Oil & Gas Mergers & Acquisitions Report provides an overview of the M&A activity in the oil and gas sector for the first half of 2010. This article discusses the new partnership model for a new breed of E&P company that has emerged with a focus on core competencies and unconventional assets with a low-cost. visit www. Reacting. The report indicates that the energy industry is getting back to normal. but they are also developments that spring from top-down decisions and actions that may not indicate whether. international oil companies. volatility in commodity and energy prices. This article discusses several solutions. growing shareholder activism. an imbalance of supply and demand. Operators face two major challenges for unconventional gas development: securing services and equipment for operations and lack of leverage in a seller’s market.deloitte.
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