Stay tuned for more upcoming webcasts
PwC's Oil and Gas Deals practice invites you to join us for a webcast on May 14 at 11:00 am CDT titled Dealing with $50 oil: First quarter deal trends and analysis.
US oil and gas deal-making stalled during the first quarter of 2015 as oil price volatility created uncertainty in the industry and pushed buyers to the sidelines. The decrease in M&A activity was particularly evident in the upstream E&P segment which saw a decrease in the number of announced deals by 67% sequentially, and 35% when compared to the same period last year respectively. Shale deals also ticked down as the velocity and magnitude of the commodity price drop shifted the attention away from growth strategies and into cost reductions. The question now is what does this mean for deal-making for the rest of the year?
The oil & gas industry is an asset intensive business which requires continuous capital investment in order to deliver value to its customers and shareholders, even during macro-economic events like we're facing today. Capital Productivity, the ratio of revenue derived from capital deployed, is a measure of that value. Capital Productivity is largely determined by Capital Efficiency -- funding the right projects at the right time, finding off-ramps for those that no longer align with corporate strategy, developing assets at the lowest cost possible, and getting to production faster than the competition.