Oilpatch acquisitions expected to increase, price recovery could follow

Interesting report from Sanford C. Bernstein & Co. suggesting M&A likely to accelerate into 2016 with recovery in crude to follow. Potential buyers could include National oil companies in Asia (PetroChina Co.) and India (Oil & Natural Gas Corp.). Possible targets could include Occidental Petroleum Corp., Devon Energy Corp., Genel Energy Plc and InterOil Corp., according to the report. A few recent examples of increased M&A include Australia’s Santos rejecting a A$6.88 US-per-share offer from Scepter Partners in October and Oil Search Ltd. in September rejecting an $8-billion US bid from Woodside Petroleum Ltd. In Canada, we saw Canadian Oil Sands Ltd. (the largest owner of Syncrude) recently state that it is considering alternatives to Suncor Energy Inc.’s $4.3-billion hostile takeover bid and has already had interest from possible suitors. Also, PetroChina and China Petroleum & Chemical Corp (Asia’s largest refiner) recently signaled that they are both looking at overseas acquisitions.