MORE CONSOLIDATION AHEAD

For now, consolidation in the North American independent oil and gas industry proceeds at a sedate pace. But change is looming. As global commodity prices return to historical levels, weaker competitors in the North American oil and gas business will be exposed to cash-rich rivals. Merger activity,...

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Bibliographic Details
Published in:Oil & Gas Investor 2003-12, Vol.23 (12), p.51
Main Authors: Weissgarber, Paul, Vance, Scott, Walters, Neal
Format: Article
Language:English
Subjects:
Commodities
Competition
Consolidation
Debt restructuring
Energy
Gas industry
Market positioning
Oil and gas industry
Peers
Petroleum industry
Prices
Profitability
Stockholders
Value creation
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Summary:For now, consolidation in the North American independent oil and gas industry proceeds at a sedate pace. But change is looming. As global commodity prices return to historical levels, weaker competitors in the North American oil and gas business will be exposed to cash-rich rivals. Merger activity, which currently lags that of other industries, will continue at a more rapid clip. The question for the oil industry is how to interpret and prepare for the coming rounds of consolidation. A distinct pattern lies hidden beneath the seeming chaos in merger and acquisition activity in any industry. Consolidation activity passes through four stages over a period of approximately 20 years: 1. opening stage, 2. scale stage, 3. focus stage, and 4. balance and alliance stage.
ISSN:0744-5881