Akin Gump Authors Discuss Energy M&A Amidst Declining Oil Prices
Nicholas Antonas, an associate in Akin Gump’s global energy and transactions practice, and Hannah Marshall, a trainee solicitor, have authored the article “Will plunging oil prices increase energy M&A?” which appeared in Globe Law and Business.
The article addresses the recent drop in crude prices and its effect on energy M&A transactions. The authors note that exploration and production companies and oil industry service providers have been the hardest hit by the low prices as companies try to cut spending. Amid those reduced expenditures, they write, there is likely to be less of an appetite for expansion, and less cash may be available for exploration drilling, new projects and reinvestment.
According to Antonas and Marshall, businesses that invest in distressed companies are likely to become active in the oil sector as company valuations fall. At lower prices, certain assets could become available to larger cash-rich oil companies. This, in turn, could lead to an increase in asset sales, distressed M&A and strategic combinations in the oil and gas sector in 2015.
This article also appeared in Intellectual Asset Management.