How Oil and Gas Consulting Companies Find the Silver Lining
In a depressed commodities market oil and gas consulting is sought after to help companies facing pressure to reduce costs and optimize capital and asset investments. This year, oil and gas consulting is prepared to provide distressed companies with financial advisory services, but oil and gas firms may also shed some light on the flip-side for strong companies with M&A opportunities.
The oil-price collapse is majorly impacting exploration and production companies and oilfield services companies. Companies in the upstream sector may struggle to endure the decline in prices, especially new and smaller operators. Upstream companies’ challenge will be to maintain operations when funds are significantly reduced and projects are forced to reschedule or halt completely. Consequently, this means divestitures and consolidation for some companies.
The silver lining is that this presents a strategic buying opportunity for well-positioned E&P companies. Small companies with debt may not weather the downturn, and will become attractive targets of acquisition. Major upstream companies and even large midstream companies may reap the benefit of asset sales from distressed companies.
Oil and gas companies in a stable position can greatly benefit from transaction advisory services, which will help identify prospective M&A advantages. Oil and gas consultants can assist these companies with services like expert portfolio analysis, financial forecasting, and valuations. They can prevent risky sales due to major liabilities and assist with the negotiation of sales when there is a valuation disagreement. Oil and gas consultants can help companies make the best decisions and capitalize on possible deals.
Oil and gas firms can provide invaluable insight for companies taking advantage of the bright side of the dip in oil prices. Companies should remember the services that oil and gas consulting can provide beyond issues related to the negative effects of the price situation. Oil and gas consulting helps companies not only maintain, but they can make them thrive.