Michael Byrd Quoted in Rigzone on Upstream M&A Activity
Michael Byrd, a partner in Akin Gump’s oil and gas practice, has been quoted by Rigzone in the article “Pent-Up M&A Could Release Flood of 2016 Deals,” which examines recent trends in upstream mergers and acquisitions activity.
While low oil prices have put a damper on deal activity, the article says high-volume deals are expected once prices stabilize. Byrd noted there has already been a pick-up, with “a big increase in this quarter.” He added, “A lot of acquisitions are driven primarily by the desire to pick up undeveloped acreage for drilling. Some of the premium basins, the Eagle Ford and the Permian Basin, are still the prized fields where people are spending big money to acquire properties.”
For those who are selling, Byrd said he is seeing distressed companies having to accept lower prices, but in many cases, the sellers are private companies that bought low and view now as the time to exit. “They’re getting good prices from strong buyers.”
Additionally, Byrd said, contract terms are evolving to accelerate the growing buyers’ market. Contrary to the last several years when it was more of a sellers’ market, current sellers are more willing to retain certain liability, and accept stronger and longer warranties and indemnities.