Oil Company M&A Activity Is Down

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Oil Company M&A Activity Is Down


WASHINGTON, D.C. — While merger and acquisition activity has heated up in the convenience store industry, the oil sector has cooled down.

According to a report by the Energy Information Administration (EIA), the 137 oil sector deals announced in the second quarter of 2015 was the lowest number of deals since the fourth quarter of 2008, and 42 percent below the 235 median quarterly number of deals over the previous two years, indicating less breadth of activity.

Despite the decrease in the number of deals, the second quarter of this year exhibited the largest amount of oil companies' merger and acquisition activity by value since the fourth quarter of 2012. The deal between Royal Dutch Shell and BG Group, which was announced in early April, accounted for $84 billion of the $115 billion quarterly total, the report stated.

However, without that merger, the value of the deals during the quarter would have totaled $31 billion, $18 billion higher than the first quarter, which was the lowest since at least 2008, EIA reported. 

In addition, the time it takes to negotiate a deal, the availability and cost of financing, as well as legal factors also play a critical role in the value and amount of activity, the EIA added.