Market Turmoil May Amplify M&A Slowdown for Conventional Assets

摘要

As oil and gas companies operating in North America reallocate capital to liquids-rich or still-attractive unconventional dry gas plays, several firms have looked to offload conventional dry gas holdings no longer deemed core to the investment portfolio. But the appetite for these assets has meaningfully weakened of late - a trend likely to be magnified by the recent turmoil shaking both financial markets and the broader economy.Benchmark Nymex gas prices have been sub-$5 per million Btu for much of the last 18 months, but a notable slowdown in the flow of deals taking place in the region's conventional gas space has been a more recent occurrence. The number of North American conventional gas deals announced during the first half of the year totaled 36, according to Derrick Petroleum Services - a run rate on pace with the trough months of 2009 and consequently significantly lower than that seen in other recent years. Derrick says 115 gas-focused conventional deals were announced in both 2007 and in 2008, while 91 took place in 2010.