Bill Marko, managing director at Jefferies LLC, sat down with Hart Energy’s Emily Patsy and Jessica Morales to discuss what’s taken place for the oil and gas industry following a historic crash in oil prices plus the collapse in demand due to the COVID-19 pandemic.
“I’ve been doing this 40 years—I’ve never seen a downturn like this,” Marko said before adding, “It’s going to dramatically and permanently change the business.”
As far as the current state of the A&D market for oil and gas goes, he said: “It’s absolutely dead. The only activity you’ve seen on the A&D business has been deals that were underway and had agreements.
Marko noted that for those lingering transactions, sellers and buyers took a step back to look at the current oil and gas price outlook and ended up recasting deals. Examples of redone deals include the sale of Devon Energy Corp.’s Barnett Shale asset and BP Plc’s Alaska sale to Hilcorp Energy Co.
In terms of new deal flow, it’s the same story. “It’s dead and it’s because of the challenge of what will commodity price be in the next three months, in the next year, in the next three years,” he said.
Jump to a topic:
- Oil market overview (0:40)
- State of the A&D market (3:05)
- Permanent change? (5:50)
- U.S. shale outlook (8:15)
- Public capital markets (10:15)
- Private equity investors (13:12)
- Keys to survival (15:10)
Recommended Reading
EQT Sees Clear Path to $5B in Potential Divestments
2024-04-24 - EQT Corp. executives said that an April deal with Equinor has been a catalyst for talks with potential buyers.
Matador Hoards Dry Powder for Potential M&A, Adds Delaware Acreage
2024-04-24 - Delaware-focused E&P Matador Resources is growing oil production, expanding midstream capacity, keeping debt low and hunting for M&A opportunities.
TotalEnergies, Vanguard Renewables Form RNG JV in US
2024-04-24 - Total Energies and Vanguard Renewable’s equally owned joint venture initially aims to advance 10 RNG projects into construction during the next 12 months.
Ithaca Energy to Buy Eni's UK Assets in $938MM North Sea Deal
2024-04-23 - Eni, one of Italy's biggest energy companies, will transfer its U.K. business in exchange for 38.5% of Ithaca's share capital, while the existing Ithaca Energy shareholders will own the remaining 61.5% of the combined group.
EIG’s MidOcean Closes Purchase of 20% Stake in Peru LNG
2024-04-23 - MidOcean Energy’s deal for SK Earthon’s Peru LNG follows a March deal to purchase Tokyo Gas’ LNG interests in Australia.