Oil and gas M&A uptick likely in 2016, says Fitch exec
The pace of mergers and acquisitions in the oil and gas sector is likely to pick up towards the latter half of 2016, according to Alex Griffiths, Managing Director and Head of Natural Resources and Commodities (EMEA) at Fitch Ratings.
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Speaking to Sharecast on the sidelines of the ratings agency’s London Energy Seminar on Tuesday, Griffiths said, “The current slump in prices has put pressure on many companies, with assets to whole companies being in play for potential buyers. While oil and gas M&A activity won’t quite bounceback to levels seen in the boom years, there should be an improvement next year.”
Much of this might be attributed to the bid/ask levels narrowing over the second half of 2016, as some companies, especially smaller independents, are compelled by circumstances “to sell the family silver.”
“It is something the independents might be opposed to at the moment, especially as we are in a buyers’ market. But a prolonged period of lower oil prices might well force their hand,” Griffiths concluded.