As featured in Energy Voice, Anderson Anderson & Brown Corporate Finance ("AABcf") is delighted to share with you our quarterly Deals+ update for Q1 2021, highlighting selected Energy M&A and Fundraising transactions across the UK.
Reflecting on Q1 2021
A year on from being hit by some of the biggest challenges the upstream E&P sector has ever faced, we have seen in Q 1 2021 a greater volume of disclosed North Sea deal value than in the whole of 2020 The oil price is riding above 63 at the time of writing, with Goldman Sachs predicting it could reach 80 by the third quarter.
What a difference a year can make! An anticipated post Covid recovery is definitely a factor This is reflected in a hike in Chinese demand that is meeting limited supply for a wide range of commodities The US Senate’s 1 9 trn stimulus package is another factor, pointing towards the world’s biggest oil consumer getting back up to speed Add to this
OPEC’s production cut extension in early March and the latest attempted drone attack on Saudi Arabian infrastructure All considered these factors are pointing towards higher and possibly more stable oil prices.
As we look at M&A activity in Q 1 2021 there were a number of significant deals which have led the way in the overall market rebound We saw NEO, a Norwegian producer complete the acquisition of private equity backed Zenor Petroleum in a deal worth 450 m along with the 700 m dea l for a package of fields from ExxonMobil in an acquisitive quarter for the company Furthermore, Waldorf Production, specialists in the E&P sector are set to acquire Cairn Energy’s stake in the Catcher and Kraken fields in a deal worth 330 m.
As we head into Q2 2021 and look further down the road in 2021 we expect the slow global economic rebound to continue, with there being a strong pipeline of deal opportunities to be pursued within the Oil Gas sector and wider markets.