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BDO :ENERGY CFOS PREDICT MERGER AND ACQUISITIONS ACTIVITY TO RISE
January 12, 2013
By Rob Starr, Content Manager, Big4.com
According to a new study by BDO USA, LLP, mergers and acquisitions in the U.S. oil and gas industry will rise in 2013 as companies seek to strengthen their financial position and take advantage of increased prices and an anticipated abundance in supply and demand for oil and gas. Fifty-three percent of U.S. oil and gas chief financial officers (CFOs) see an increase in merger and acquisition activity in the coming year, the second consecutive year a majority of CFOs have predicted an upward trend.
As important as M&A activity has become, few CFOs (3 percent) see the trend as being the primary driver of growth in the industry in 2013. Moreover, the pursuit of a merger or acquisition is cited by just over a quarter of CFOs (26 percent) as a top option for increasing shareholder value, polling slightly behind a focus on nonconventional areas (28 percent).
These findings are from the BDO 2013 Energy Outlook Survey, which examined the opinions of 100 chief financial officers at U.S. oil and gas exploration and production companies. The nationwide survey was conducted in September and October 2012.
Most CFOs (66 percent) see employment in the oil and gas sector staying relatively consistent with that of 2012. However, 25 percent expect an uptick in the number of personnel employed by their company in the coming year, while only 8 percent predict a decline. Twenty-five percent of CFOs also expect an increase in fiscal year 2012 employee bonuses, and nearly double this amount (43 percent) feel bonuses will stay at the same solid payout levels as in fiscal year 2011.