SHADOW MARKET

摘要

The bright side of first-half 2019 A&D activity is that it's difficult to see how it could get worse any time soon.First-quarter transactions”screeched to a halt”in the first quarter,with the lowest quarterly deal value recorded in a decade,according to Raymond James’analysis.A bounce back in deal values in the second quarter rested heavily on the shoulders of Occidental Petroleum Corp.'s merger with Anadarko Petroleum Corp.in a deal valued between $57 billion and $64 billion.Around the edges of the supernova merger burned a pale corona of asset deals.In the Bakken,Permian,Eagle Ford,Marcellus and Haynesville,PwC counted just nine upstream shale deals in second-quarter 2019.In a July report,PwC said a new reality is settling over contemporary oil production.”Investors and lenders are no longer writing checks to companies that can't show positive cash flow.Eager to black ink,corporate deal-makers are looking to drive scale efficiencies.”Any lingering doubts about an off-kilter start to 2019 have been confirmed by numbers indicating the sector is sailing in shallow waters.The asset-level A&D environment is soft,though it still has epicenters of relatively strong or at least functional markets,said Art Krasny,managing director and head of A&D at Wells Fargo Securities.As of late July,A&D asset transactions totaled roughly $13 billion.At its current pace,A&D values in 2019 may eventually tick up to perhaps $25 billion for the year,plus or minus $5 billion—at least a 30% decline compared to 2018,he said.That's a shadow of a market that already showed weakness in 2017 and 2018.