Tuesday, October 29
The ownership in the North Sea is changing hands. The finance for this transition has predominantly not come from the public markets which are more concerned by the transition to a net zero carbon world. Hurricane’s 2017 capital raise to fund its Lancaster Early Production System is the exception which proves the rule.
Yet these are all long lived assets the ownership of which doesn’t sit naturally in private hands. Can we expect to see a return to the days when E&P company valuations were predominantly driven by greed? Or is fear set to remain the driving force.
Chief Financial Officer
Since the oil price collapse in 2014, E&P investors have been keenly focused on returns, capital outlay, cost reduction and scale. Majors and IOCs are under pressure to rationalise their asset portfolios to develop new reserves and infrastructure in a more disciplined and cost-efficient manner. New capital is preferentially flowing to value driven players that are gaining scale, reducing costs, and generating positive free cash flows from the unwanted assets of Majors and IOCs. With the narrowing bid/ask spread and relatively stable commodity prices, upstream M&A&D market is highly active across the globe. Transactions are becoming structurally more complex and tailored to address specific issues related to the asset maturity and the financing requirements of the buyers.
The session will focus on the current M&A&D trends with valuable perspectives from the recent transactions.
Siccar Point Energy
Since the UN Sustainable Development Goals were set in 2015, and the Paris Agreement in 2016, there has been considerably more focus on Energy Transition and the role oil and gas needs to play in delivering these goals, in particular commitments on Climate Change. This session will cover the changing expectations of investors and other stakeholders and the likely interplay between oil and gas, renewables and carbon capture going forward. It will also discuss the enabling technologies, financial structuring and governance required to make progress. It will touch on what projects are already out there and what the future trends are likely to be.
Head of Energy
OGCI Clean Gas Project, BP
The 2008 financial crisis, followed by the 2014 oil-price downturn, resulted in a funding gap for many independent E&P companies, as banks reduced lending portfolio risk and re-capitalised to meet new banking regulations. Over the same period, the strategies of many major E&P companies evolved, with several aiming to exit mature basins, opening the way for smaller companies. This enabled a new wave of private equity portfolio companies and other vehicles backed by non-traditional investments to enter the industry.
The panel will cover related issues, including; the rise of private finance in E&P, how this fits with typical asset life-cycles, how private finance differs from more traditional equity, bond, or reserves-based lending, and encourage audience discussion on what the future holds.
Blue Water Energy
This session will focus on capital efficiency: how the upstream industry is saving costs and improving margins for example, through enhanced developments, improved operations or organisational performance. With many mature assets as well as development prospects having changed ownership in recent years, technology is being deployed to deliver improvements in capital efficiency. So how have the new operators used technology and management practices to increase their asset value? Are there game-changing technologies that could make a difference in the coming years? Speakers will share field examples and case studies with the audience as well as provide a view on possible future developments.
Head of Strategy
Director Growth Assets
Digital and Cyber Security Expert
Oil & Gas UK