Citigroup Inc. said Nov. 13 it hired four bankers to work on the buying and selling of oil and gas acreage, betting the dislocation in commodity markets in 2020 will yield more land deals among energy producers.
The quartet is led by Tony Fernandez, previously with boutique investment bank Intrepid Financial Partners, and also includes two hires from Jefferies Financial Group and another former Intrepid banker, according to a Citi statement.
The pace of mergers and acquisitions in the U.S. oil and gas sector has been the worst in a decade, according to data provider Enverus, as most shale producers remain reluctant to spend after an oil price crash earlier this year.
While the market for land deals has remained weak as firms eschew growth, some producer tie-ups have happened in the last few weeks, as companies seek scale to reduce costs.
More A&D deals could happen in 2021 though. Exxon Mobil Corp. said last month it was evaluating whether to sell natural gas holdings in North America as it grapples with market conditions. BP Plc wants to remake itself as a green energy company, which will require shrinking its oil and gas business over time.
“The sector has entered into consolidation phase and the A&D activity will likely pick up in 2021 as companies seek to deleverage, the energy market stabilizes and improves, and companies seek to divest of non-core assets post consolidation,” Stephen Trauber, global head of energy at Citi.
Recommended Reading
Ithaca Energy to Buy Eni's UK Assets in $938MM North Sea Deal
2024-04-23 - Eni, one of Italy's biggest energy companies, will transfer its U.K. business in exchange for 38.5% of Ithaca's share capital, while the existing Ithaca Energy shareholders will own the remaining 61.5% of the combined group.
Triangle Energy, JV Set to Drill in North Perth Basin
2024-04-18 - The Booth-1 prospect is planned to be the first well in the joint venture’s —Triangle Energy, Strike Energy and New Zealand Oil and Gas — upcoming drilling campaign.
EIG’s MidOcean Closes Purchase of 20% Stake in Peru LNG
2024-04-23 - MidOcean Energy’s deal for SK Earthon’s Peru LNG follows a March deal to purchase Tokyo Gas’ LNG interests in Australia.
Equinor Acquires Stake in Standard Lithium Smackover Projects
2024-05-08 - Equinor’s transaction, completed effective May 7, includes interests in Standard Lithium’s flagship South West Arkansas Project and East Texas properties.
Crescent Point Divests Non-core Saskatchewan Assets to Saturn Oil & Gas
2024-05-07 - Crescent Point Energy is divesting non-core assets to boost its portfolio for long-term sustainability and repay debt.