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Over-capacity slows deal flow in Q3

handshake - deal done

Anderson Anderson & Brown Corporate Finance is delighted to share with you our quarterly Deals+ update for Q3 2019 in conjunction with Energy Voice, highlighting selected oil and gas mergers and acquisitions and fundraising transactions across the UK

From a North Sea perspective, oil and gas deal flow in Q3 2019 slowed with fewer Private Equity (PE) backed transactions in comparison to previous quarters and the majors continuing to take a disciplined approach to capital and operating expenditure.

Despite this, there are significant opportunities available due to the continued divestment of non-core activities where the focus continues to be on maximising economic recovery from a mature basin.

While it is perhaps optimistic to suggest a renaissance in the North Sea, there is evidence of a rejuvenation, albeit sanctioned exploration projects and new discoveries are still far behind pre-2014 levels.

This is largely the result of a supply glut in the industry with significant over-capacity among oilfield service providers resulting in lower vessel utilisation rates and a renewed focus on offshore renewables projects, particularly from a subsea perspective.

Merger and acquisition activity in Q3 2019 has continued to feature the disposal of non-core activities among oilfield service providers with notable transactions including Proserv’s disposal of subsea communications business Nautronix and the disposal of their field technology business to Imenco and Acteon respectively.

Elsewhere in the market, Ashtead Technology, backed by Buckthorn Partners, acquired Aberdeen-based Underwater Cutting Solutions, a deal that will further expand their IMR and decommissioning capabilities.

From an E&P perspective, notable transactions included Energean’s acquisition of Edison for c.£667 million and Perenco’s acquisition of the remaining 51% stake in Petrofac’s Mexican operations for c.£221m.

As we head into Q4 2019, we continue to maintain strong positive momentum with a healthy pipeline of deal opportunities, and we will continue to invest time and resources with a view to initiating strategically compelling transactions for our clients.

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