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UK Producers Prepare to Take a Pounding

Alastair Young recently told Natural Gas World that he is expecting a mixture of outcomes in the oil and gas market: “some deals will be halted but others will be accelerated, depending on each set of circumstances.”

“The combination of the ‘black-swan’ event of the coronavirus pandemic and the collapse in the oil price will put the brakes on some deals in the UKCS. Low and volatile oil prices and other uncertainties can widen bid/ask spreads between buyers and seller making it hard to close deals.”

But there could also be some distressed takeovers in the UKCS as hedges roll off and the low oil price starts to bite less well-capitalised oil companies. “There are deals to be done in the UKCS and buyers with access to capital who are willing to look through the current downturn could emerge as winners,” he said.

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