2015 M&A Review and 2016 Outlook

By Duane Donner

In 2015, oil prices were projected to rebound from the over 50% decline in 2014, but crude oil prices declined further to a 10-year low of $37 per barrel in December 2015. Then they dropped even lower in Q1 2016. The sustained low price environment is obviously creating distinct industry change as oil has become more of an abundance than a scarcity.

Most companies passed on M&A activity in 2015 to focus on core business operations, and long standing oil and gas business models were challenged. The biggest exception to this in the OFS sector was the merger between Schlumberger and Cameron that was announced in August 2015 and completed in April 2016. The two companies combined in a cash and stock transaction that had a total transaction value of $14.8B.

There was a significant decline in U.S. Oil and Gas Private Equity Deals in 2015 from the 10-year high that was achieved in 2014. Figure A below illustrates the steep decline in both deal volume and deal value from 2014 to 2015.

Oil & Gas Activity by Year

In the April Edition of our Oil and Gas Newsletter, we further review the decline in M&A Activity in 2015 and discuss what this means for valuations and funding in 2016. Follow the link below to read the full April Oil & Gas Newsletter: 2015 M&A Review and 2016 Outlook.

Founders Oil and Gas Newsletter

About Founders Investment Banking

Founders Investment Banking (Founders) is a merger, acquisition & strategic advisory firm serving middle-market companies. Founders’ focus is on oil and gas, SaaS/software, industrials, internet, digital media and healthcare companies located nationwide, as well as companies based in the Southeast across a variety of industries. Founders’ skilled professionals, proven expertise and process-based solutions help companies access growth capital, make acquisitions, and/or prepare for and execute liquidity events to achieve specific financial goals. In order to provide securities-related services discussed herein, certain principals of Founders are licensed with M&A Securities Group, Inc. or Founders M&A Advisory, LLC, both members FINRA & SiPC. M&A Securities Group and Founders are unaffiliated entities. Founders M&A Advisory is a wholly owned subsidiary of Founders. For more information, visit www.foundersib.com.