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.

Subscribe to Today in Houston

Fill out the form below to subscribe our new daily editorial newsletter from the HPM Newsroom.

* required


Andrew Schneider

Andrew Schneider

Politics and Government Reporter

Andrew heads Houston Public Media’s coverage of national, state, and local elections. He also reports on major policy issues before the Texas Legislature and county and city governments across Greater Houston. Before taking up his current post, Andrew spent five years as Houston Public Media’s business reporter, covering the oil...

More Information