That's an order of magnitude drop in mergers and acquisitions.Drillinginfo said:AUSTIN, TX, April 04, 2019 (GLOBE NEWSWIRE) -- Drillinginfo, the leading energy SaaS and data analytics company, reported today that U.S. oil and gas M&A deal values have plunged to a record 10-year low in the first quarter of 2019. A slump that began in late 2018 has carried over into the new year and the $1.6 billion in Q1 deals is down 91 percent from Q4 2018, and down 93 percent compared to Q1 2018. The slump follows the $82 billion in deals in 2018 that set a four-year record high.
Remaining consistent with Drillinginfo analysts predictions at the start of the year, a confluence of factors drove deal values down, including the rapid 40 percent drop in oil prices in late 2018. The primary contributing factor appears to be Wall Street’s pressure to deliver on free cash flow and weak equity and debt markets available to fund deals. Meanwhile, private equity – which has in recent cycles stepped in as an opportunistic buyer to take advantage of pullbacks by public E&Ps – has largely sat on the sidelines.
Ultimately, 2019 could be a watershed year for U.S. shale. If free cash flow is reliably demonstrated, Wall Street’s approval is likely to return along with capital for deals. Given the current backlog of assets, there could be a rapid return of activity once the outlook improves.
How are the companies doing?
Sanchez Energy, once trading at $38 per share, was delisted from NYSE late Feb for repeatedly failing to meet $1/share [Chron, now trading at 11¢ as of today. By intended drilling activity, measured in number of permits, this was the #2 company in Eagle Ford, compared to EOG's #1 [ref], the latter also leading by production, according to some] reporting on Permian's loss being Eagle Ford's gain last fall.
Companies compared to Oct 2018 peak, except Laredo Petroleum late Sep 2018:
|LPI Laredo Petroleum||8.80||3.74||3.12||-65%||0.746B|
|OAS Oasis Petroleum||14.22||5.54||6.15||-57%||1.99B|
|SM SM Energy||33.47||15.34||15.96||-52%||1.81B|
|WLL Whiting Petroleum||54.51||22.21||27.69||-49%||2.57B|
|CPE Callon Petroleum||12.84||6.55||7.50||-42%||1.71B|
|CLR Continental Res.||71.79||41.96||47.79||-33%||18.09B|
|WRD Wildhorse Res.||23.72||17.38||16.97||-28%||1.73B|
|CXO Concho Res.||159.96||106.69||118.11||-26%||23.29B|
|PXD Pioneer Nat. Res.||187.92||134.30||164.94||-12%||28.00B|
|Main Oil Companies:|