By: Duane Donner
The number of Oilfield Service (OFS) M&A transactions are on pace to be up ~40% in Q1 2018 over Q1 2017 levels. Buyers of OFS companies are starting to get comfortable with the rebound in energy prices, as production cuts from OPEC have allowed the U.S. to dip into its bountiful oil inventories.
The stability has also provided E&P companies confidence to invest in capex in 2018, with over 70% of the operators we track indicating that spending will increase over 2017 levels. Some operators with a large presence in the Permian, such as Pioneer Natural Resources, have indicated that 2018 could be one of the strongest years for capex spend in the company’s history.
Along with a strong spending environment, OFS companies should also meaningfully benefit from the newly passed tax reform – the first since the Reagan administration in the 1980’s. Below we provide a summary of the key points that could have a meaningful impact on businesses in the sector.
For more information on OFS transactions, E&P capex outlook, and tax reform, please click here for our newsletter.
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Founders Advisors (Founders) is a merger, acquisition, & strategic advisory firm serving middle-market companies. Founders’ focus is on energy, SaaS/software, value-added distribution, industrial technology, internet, healthcare, and digital media 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 of member 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, please visit www.foundersib.com.