Oil and Gas Consultants in the Current Landscape: Q4 2015
Oil and gas consultants in the oil and gas landscape through 2015/2016 provide many opportunities to help E&Ps and service companies alike.
Oil and gas consultants have become increasingly essential to companies in the oil and gas practice in the current market conditions by demonstrating their value in helping distressed companies weather turbulent times. Faced with continued low market prices and pressure from stakeholders, oil and gas E&P and service companies have been forced to reduce their spending in order to reduce their losses, meet debt covenants, and for some companies, remain profitable.
Most oil and gas E&P’s and service companies slashed capital programs as early as last 4Q2014 and 1Q2015 and have since moved towards aggressive cost cutting policies to further reduce operating and G&A expenses. Moreover, in order to further reduce expenses, companies have reduced overall headcount across all company levels in order to further mitigate losses.
What does this mean for the Oil and Gas Consultant?Oil and gas consultancies see the current market conditions as conducive to providing guidance opportunities and lending expertise in the areas of acquisitions, divestitures, restructuring, and a slew of additional consulting opportunities in order to help companies faced with complex situations in a volatile market.
Oil and gas consultants can be helpful to companies with workforce constraints. Oil and gas companies' highest expense category, after capital and operating expenses, is often the employee-related expenses, such as salaries, benefits, and taxes. In the last year, there have been many announcements of personnel layoffs across companies of all sizes.
Oil and gas consulting firms are dedicated to hiring personnel with oil and gas accounting and operational expertise. Oil and gas consultants are efficient and prepared to deliver deep industry experience in a variety of roles, leaving a minimal ramp up period. Additionally, there are no long-term expense commitments and no benefit commitments, thus making it very easy to add and reduce FTE headcount on an “as needed” basis.
The current type of environment in the energy industry lends itself to non-recurring transactions such as acquisitions, divestitures, different forms of restructuring, and process reengineering. This is when hiring an oil and gas consulting firm is paramount.
Oil and gas consultants are ideal for short-term projects such as transactions, restructuring and processes optimization. Leading Oil and gas consulting firms have specialized transactions, mergers and acquisitions, and restructuring practices, all of which are specialized in understanding complex situations unique to E&P’s and service companies.
Oil and gas consultants, overall, are essential to both E&P and service companies with workforce constraints, and to helping navigate complex transactions that are common in the current market conditions.