Complex capital needs continue to serve as a catalyst to a large portion of the global energy M&A activity in the second quarter of 2016. As a result, the first half of 2016 experienced several distressed asset sales and consolidation in the industry. Bankruptcies, subsiding revenues, dwindling capex budgets, and downward reserve valuations are expected to create a dynamic M&A environment moving forward that fosters creative deal-making in the industry.
Commodity price volatility has continued to impact the M&A activity in the Global Energy industry at the beginning of 2016. However, stabilizing oil prices in the second half of Q1 2016 are helping to offset downward reserve valuations and are expected to produce M&A opportunities in the industry over the coming quarters of 2016.
With oil prices reaching its lowest level since September 2003 and gas prices declining due to unseasonably warm weather in certain parts of the US, there is uncertainty in the market that is putting increased pressure on M&A activity. KPMG CF is committed to helping clients unlock value available to industry participants in this current market environment.