Oilfield Services Consolidation

Navigating the Rough Waters of Sector Transformation

The OFS industry is still reeling from a severe industry downturn which began in mid-2014. With a significant crude price decline, M&A activity slowed substantially from the historically high levels of late 2013 and the first half of 2014. Adjusting to the “lower-for-longer” environment, OFS companies have been stabilizing balance sheets and right-sizing cost structure. The sector landscape has been changing, with signs of readiness for corporate transaction activity. Energy executives are now looking to deals as a means to achieve scale, fill in portfolios or enhance capabilities.

Positioning and deals strategy

To avoid the common pitfalls that plague transactions, successful dealmakers should consider several key factors:

  • How are we positioned today and which capabilities do we need to enhance or obtain in order to deliver the winning value proposition to our customers? 
  • Which deals best fit with our position and allow us access to desired capabilities? 
  • Are target’s business models complimentary to our own? 
  • Should we buy or seek an alternative way to obtain access to these capabilities? 
  • How should we execute the deal?

 

Four types of companies

Successful companies develop a deal value proposition that differentiates them from their peers and enhances growth potential. Furthermore, deal strategy and a way to play should be aligned with current asset strength and liquidity position. The appropriate course of action for a given company can be defined by its fit in one of the following four categories:

 

Contact us

Doug Meier
US Energy Deals Leader
Tel: +1 (713) 356 5233
Email

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Ashley Apel Gerdy
US EU&M Sector Marketing Senior Manager
Tel: +1 (713) 356 4185
Email

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