u.s. oil and gas m&a survey
TRANSCRIPT
Brunswick Group
U.S. Oil and Gas M&A Survey April 2015
Summary
• Brunswick surveyed 105 people, including bankers, lawyers, private equity investors, analysts and investment
managers specializing in the energy sector.
• Overall, more than half of respondents anticipate an increase in M&A activity in the U.S. oil and gas sector in 2015.
Driving factors include further decline in global oil prices and a desire to reduce operating costs through deal
synergies.
• Corporate deal makers and the investment community have differing opinions around the timing of any M&A
activity: More than two-thirds of the investment community (68% of analysts and investment managers) expects a
greater number of deals this year than in 2014, while most deal advisors surveyed (80% of the bankers and lawyers)
believe that 2015 will not be an active M&A year.
• Respondents believe that domestic transactions by strategic buyers in the services and upstream segments
will be the main focus of deal activity in 2015.
• U.S. oil and gas industry likely to arouse interest from Asian, European and Middle Eastern buyers.
• Nearly two-thirds of respondents see activist investors playing a driving role in M&A in the oil and gas sector.
Key Findings
Q: In 2015, do you expect the level of M&A activity in the U.S oil and gas sector to…
More than half (52%) of respondents feel that the level of M&A activity in the U.S. oil and gas sector will increase over the next year
34%
14%
52% Increase
Stay the Same
Decrease
Q: In 2015, do you expect the level of corporate spinoffs and divestitures in the U.S. oil and gas sector to…
The level of corporate spinoffs and divestitures is expected to increase in 2015
34%
20%
46% Increase
Stay the Same
Decrease
Q: What types of deals do you expect to drive M&A activity in the U.S. oil and gas sector in 2015?
Respondents feel that domestic transactions among strategic buyers will dominate the deals taking place in the oil and gas sector in 2015
78%
19% 16%
Domestic transactions among strategicbuyers
Foreign acquirers into the U.S. U.S. acquirer outside of the U.S.
Percentages add up to more than 100% as the above was a multiple-response question
53%
48%
25%
16%
13%
Further decline in global oil prices
Operational synergies
Shareholder activism / pressure from investors
An increase in global oil prices
More cash on balance sheets
Q: What are the key factors that will drive oil and gas sector M&A in 2015?
The further decline in global oil prices coupled with operational synergies are seen as the key factors driving oil and gas M&A in 2015
Percentages add up to more than 100% as the above was a multiple-response question
Q: Which of the following segments of the oil and gas sector do you expect to be the main targets for M&A in 2015?
Services segment likely to be the main focus for M&A
49%
31%
30%
27%
15%
10%
Services
Upstream
Infrastructure
Midstream
Integrated Majors
Downstream
Percentages add up to more than 100% as the above was a multiple-response question
Q: From what region do you anticipate the most foreign acquirers into the U.S. oil and gas sector to come in 2015?
Asia, Europe and the Middle East are key regions for foreign acquirers
17%
22% 50%
Q: In 2015, which of the following types of buyers do you expect do be most active in M&A in the U.S. oil and gas sector?
Strategic buyers are expected to be the most active in the U.S. oil and gas sector
53%
45%
36%
18%
11%
Strategic buyers
Private equity
Industry / corporates
Hedge funds
Sovereign wealth funds
Percentages add up to more than 100% as the above was a multiple-response question
Q: Do you expect to see activity in Master Limited Partnership transactions and new equity listings in 2015….
/ In 2015, do you expect to see more deals using….
Master Limited Partnership transactions and new equity listings over the next year are expected to decrease; deals will more often than not use a mix of cash and stock.
63% say will
decrease 9% 13%
79%
All stockAll cashA mix of cash andstock
Percentages add up to more than 100% as the above was a multiple-response question
Q: In 2015, do you see activist investors playing an active role in driving M&A activity?
/ In which segments of the sector do you see activists being most active?
Finally, activist investors are here to stay with respondents seeing
them playing an ongoing role in M&A in 2015
42%
34%
28%
22%
14%
14%
Services
Upstream
Infrastructure
Integrated majors
Midstream
Downstream
63%
37%
Yes No
Percentages add up to more than 100% as the above was a multiple-response question
About Brunswick
• Brunswick Group is a leading financial and corporate communications consultancy with 23 offices across the
Americas, Europe, Africa, Middle East and Asia.
• In 2014, Brunswick ranked first in the M&A league tables globally for public relations advisors, working on 152
deals worth a combined $435 billion, according to Mergermarket data.
• In energy, the firm advises companies active in all verticals of the sector and across a range of disciplines including
M&A, restructuring, media engagement and investor relations.
• Energy clients include: Amec Foster Wheeler; BP; BG Group; Chevron; Kosmos Energy; Occidental Petroleum
Corporation and Sinopec.
© BRUNSWICK | 2015 | 14
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