'Drunken Sailor' Oil Spending May Stir Investor Merger Push

'Drunken Sailor' Oil Spending May Stir Investor Merger Push
Ben Dell doesn't just want to change how oilfield executives are paid. He thinks there could be a lot fewer of them around.

No Premiums?

Yet consolidation among explorers won’t be easy, David Deckelbaum, an analyst at KeyBanc Capital Markets Inc. in New York, said in a phone interview. This era of lower oil prices makes it especially hard to pay a premium in a merger.

“You’ll probably see consolidation that’s more in the order of mergers of equals, or stock-for-stock deals,” Deckelbaum said.

Human dynamics can’t be ignored in all this, said Buddy Clark, an oilfield transactions attorney at Haynes & Boone LLP in Houston. He expects companies will try to just keep their own assets, forgoing deals.

“Each management team thinks they have the secret sauce,” Clark said.

To contact the reporters on this story: David Wethe in Houston at dwethe@bloomberg.net; Ryan Collins in Houston at rcollins74@bloomberg.net. To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net Christine Buurma.


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