Oil and gas merger and acquisition (M&A) activity has ground to a halt in recent months due to extreme volatility in commodity markets. But don’t expect that to continue, especially in the U.S. exploration and production (E&P) sector, where valuations look attractive for buyers in the maturing shale business.
The price of global benchmark Brent crude plunged from $85 a barrel in October to below $50 in late December. The volatility spooked investors and made it impossible for buyers and sellers to agree on the fair value of assets like oil fields and drilling rigs, helping explain the paralysis in M&A markets recently.
