Energy Insights: M&A – What’s Next?
By
Graeme Pearson, Greg Pardy, Scott Hanold & Biraj Borkhataria
Published March 11, 2024
|
1 min listen
This podcast episode discusses themes in M&A and capital allocation amongst global energy producers.
In this episode, Greg Pardy (Head of Global Energy Research, Canadian Senior E&P & Integrated Oil Analyst), Scott Hanold (Managing Director, US E&P Analyst) and Biraj Borkhataria (Head of Global Energy Transition Research, Euro & US Integrated Oil Analyst) join Graeme Pearson (Co-Head of Global Research) to discuss themes in M&A and capital allocation amongst global energy producers.
M&A activity amongst energy producers is always a wildcard, but the recent tidal wave of consolidation activity unfolding in the United States is like a fever that has yet to run its course. Fortified balance sheets are the strongest we’ve seen in over a decade, with net debt at the end of 2023 about one-half that seen in 2020 during the pandemic, as energy producers globally have embraced a new model fusing financial resiliency with shareholder returns. This has also opened the door to intensified M&A activity via increased funding capacity.
US deals appear aimed at achieving quality scale, a lower cost of capital, overhead cost savings, and bolstering resource depth or enhancing portfolio diversification. The European majors could be buyers of US natural gas resources to rebalance LNG commitments. The next inflection point in this chapter could also involve M&A in Canada’s Montney play.
Disclosures and Disclaimers
View audio transcript
Graeme Pearson
Co-Head, Global Research
Graeme Pearson joined RBC Capital Markets in 2013 as Head of Research, Europe & APAC. He became Head of European Equities in 2015 and also assumed responsibility as Global Head of Research in 2018. Graeme has over 20 years industry experience and prior to joining RBC was Head of EMEA Equity Research at Nomura International. Before that, he led Lehman Brothers' No. 1-ranked European telecom services team for several years. Graeme began his career at PricewaterhouseCoopers where he became a Chartered Accountant.
Greg Pardy
Head of Global Energy Research, Canadian Senior E&P & Integrated Oil Analyst
As Head of Global Energy Research, Greg is responsible for leading a team of more than 30 professionals in Canada, the United States, Europe and Australia who cover E&Pand Integrated oil companies, Oilfield Services, as well as Energy Infrastructure, MLPs and Power &Utilities companies. He is also directly responsible for coverage of Canada's Senior E&Pand Integrated Oil companies. Prior to joining RBC Capital Markets in 2009, Greg was the Director of Equity Research at Scotia Capital for two years. Prior to this, he provided research coverage of the Canadian energy sector for 15 years at Scotia Capital and Goldman Sachs in New York. He was the top-ranked Analyst covering the Canadian Integrated &Refining sector in 2020 as per independent investor surveys. Greg is a Managing Director at RBC Capital Markets.
Scott Hanold
Managing Director, US E&P Analyst
Biraj Borkhataria
Head of Global Energy Transition Research, Euro & US Integrated Oil Analyst
Biraj joined our energy research team in 2013 and covers the large cap integrated energy companies. In the latest II Survey he ranked as the #7 analyst in the sector, and was the highest ranked analyst outside of the US. He is also RBC’s Deputy Head of European Research and helps support the wider management team. Prior to joining RBC Capital Markets, Biraj covered the metals &mining sector. Biraj studied mathematics with economics at University College London and is a CFA charterholder.
Balance SheetsCanadaCapital AllocationEnergyGlobal MarketsM&ANatural Gas
