The slowdown in the A&D market along with moderating commodity prices and repercussions from the most recent downturn have permanently changed the outlook for both public and private players in the upstream oil and gas industry.

A mid-February note from Tudor Pickering & Holt & Co. (TPH) discussed the overall “health” of private E&Ps, which, ever since the portfolio-crushing downturn of ’14, have had to shift their models—particularly their exit plans. In fact, today it’s hard to identify a typical timeframe for build-up, hold and sell for private E&P companies. Similarly, the publics must also be more cautious and measured in their approach now, as investors demand lower debt, more free cash flow and less risk.

“All signs point to a lack of visibility on exit strategies [for private E&Ps] and the need to shift business models—enter the super privates,” the firm said.

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