InSight

Exit and Growth Strategies for Middle Market Businesses

Energy Sector M&A News

By Roy Graham | Aug 18, 2016

energy sector m&a newsEnergy Sector M&A news for North American based target companies in the Energy sector for Q2 2016 included 162 closed deals, according to data published by industry data tracker FactSet.  The average transaction value was $113 million.

Pressured by continued low oil prices and a global supply glut, several leading US oil explorers are selling more than $4 billion in assets. For companies still holding cash, it could be time to buy. Anadarko, Chesapeake Energy, Noble Energy, and Statoil ASA recently announced plans to sell assets totaling about $4.3 billion. Marathon Oil has already sold $1.3 billion worth of assets. Meanwhile, US rig counts continue to decline, as oil prices remain at less than half of their 2014 peak.

Utilities in several US states are piloting residential smart energy storage programs to reduce emissions and generation costs during peak times. Companies in Kentucky, New York, and Vermont — Glasgow Electric Plant Board, Consolidated Edison, and Green Mountain Power — are installing smart energy storage devices in selected customer homes. The devices capture power from the grid during periods of low demand and release power during high-cost peak demand periods, reducing the need to supply power from traditional generation plants. All three programs use software to remotely manage the residential units as if they are a single power source, according to UtilityDIVE; the model is called a virtual power plant. The utilities are partnering with device manufacturers Sunverge, SunPower, and Tesla Motors.

Industry Indicators

  • The average US retail price for diesel and regular gas, which influences profitability for oil and gas companies, fell 14.2% and 20.5%, respectively, in the week ending July 11, 2016, compared to the same week in 2015.
  • The spot price of crude oil, which affects profitability for oil and natural gas operations, fell 10.8% in the week ending July 8, 2016, compared to the same week in 2015.

Posted by Roy Graham.

Read the Entire Energy M&A 3rd Quarter Newsletter Here


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