Oil Outlook Positive?

High oil prices may be setting the stage for a wave of mergers and acquisitions in the energy sector. Andrew Schneider reports.
oil barrelChad Watt is a Dallas-based reporter with business intelligence service mergermarket. He says that with the Libyan uprising pushing the price of oil over $100 per barrel, more oil companies will begin putting themselves on the block.

“Near term, I think it will lead some companies with lots of crude oil assets to consider looking at a sale. Whether those sales reach closure before things change in the Middle East is a whole other factor. Certainly we will have more companies look at this as an option, because this is as good as it gets for the value of the commodity that they own.”

According to the Energy Information Administration, the price of crude oil was climbing gradually for more than a year before the current spike. That may be a bigger factor in promoting mergers than Mideast violence. Wayne Beninger is head of Allegiance Capital’s oil and gas practice.

“For the last several months, attitude toward M&A in oil and gas has been very good.”

Barring a sharp drop in the price of oil, Beninger says that outlook should remain positive for months to come.
Bio photo of Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined KUHF in January 2011, after more than a decade as a print reporter for The Kiplinger Letter...