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M&A at $60 – the buying window opens


M&A at $60 – the buying window opens

Report summary

We said in December that M&A would not bounce back until there was consensus on the shape and timing of oil price recovery. It seems we are reaching this point, with growing alignment – among companies, investors, lenders and analysts – that prices will steadily recover over the next few years, to average US$80-90/bbl longer-term. In this note, we look at how the M&A market might evolve in this consensus world, the implications for deal valuation, and the downside risks.

What's included?

This report includes 1 file(s)

  • M&A at $60 – the buying window opens PDF - 682.49 KB 8 Pages, 1 Tables, 4 Figures

Description

The Corporate Week In Brief report highlights the main corporate events from the past week, and draws out the key implications for those involved.

This report summarises the latest high profile company activity, and provides expert analysis on what it means for corporate strategy and positioning. It gives you an expert point of view to understand the latest industry trends that are shaping the oil and gas sector.

Wood Mackenzie's 500 dedicated analysts are located in the markets they cover. They produce forward-looking analysis at both country and asset level across the globe, backed by our robust proprietary database of trusted research.

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  • Executive Summary
  • The story so far…
  • What happens next…?
  • The consensus scenario – now is the time to buy
    • What does this mean for M&A?
  • The bear scenario – wait and see
    • What does this mean for M&A?
  • Who are the potential buyers?
    • The big IOCs
    • The Asian NOCs
    • Private Equity (PE)
    • Influx of PE money is not without risk for investors…
    • …or the wider sector
  • Appendix
    • 1. Implied Long-term Oil Price
    • 3. PE funding examples

In this report there are 5 tables or charts, including:

  • Executive Summary
  • The story so far…
    • Oil price, Implied Long Term Oil Price, and deal activity
  • What happens next…?
  • The consensus scenario – now is the time to buy
    • Sector market performance 2014/15
    • LT Brent price implied in market EV
  • The bear scenario – wait and see
    • Gearing ratio vs. WoodMac corporate cash flow breakeven estimate 2016/2017
  • Who are the potential buyers?
  • Appendix
    • 2. Key PE transactions October 2014 to date
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