After NAPE, everyone gets together, they decide collectively to put their assets on the market. Everyone gets excited that deals are being marketed and put together engineering runs on anything and everything that appears even close to decent. Offers are made, and then…nothing. The seller expectations are not met, and buyers are once again wondering why they put all of this time and effort into getting a potential deal, that was never really “for sale.”
It is a consistent cycle that we’ve seen for a number of years now. Sellers looking at a maximum dollar amount and buyers looking at a minimum, and no one is willing to meet in the middle. As we turned into 2020, there was hope that oil would rise, and we would see some transactions happen that should have happened half a decade ago.
Sellers have to realize that their numbers have to make sense. If you wouldn’t buy at that sales number, why would anyone else? Real data, showing asset value in today’s market is what people are using. So selling based off of theory or an increased “potential” will never transact.
I talk a bunch about off-market deals because I live in that part of the A & D market every day. I see when sellers come together with buyers and talk through the reasons behind the numbers. I see buy groups actively try to meet and understand seller’s figures and communicate continuously when things don’t add up.
This continuous interaction is the only way deals are getting done. With an openness and willingness to transact at numbers that can be managed, understood and valued. Until that is the norm, the industry is going to continue to cycle out deals that aren’t transacted on.
Josh Robbins is currently the Chief Executive Officer of Beachwood Marketing. He has consulted and provided solutions for several industries, however, the majority of his consulting solutions have been in manufacturing, energy and oil and gas. Mr. Robbins has over 15 years of excellent project leadership in business development and is experienced in all aspects of oil and gas acquisitions and divestitures. He has extensive business relationships with a demonstrated ability to conduct executive level negotiations. He has developed sustainable solutions, successfully marketing oil and natural gas properties cost-effectively and efficiently. Beachwood strives to partner with top tier oil and gas firms to find off-market deals that provide maximum benefit to their corporate acquisition strategy. At Beachwood, Mr. Robbins manages the corporate branding, senior staff, and the Beachwood Strategic Consulting Group, including sales strategy development for all of the Beachwood clients. Josh has been featured in numerous trade magazines as he is an accomplished writer and speaker on the acquisition and divestment market. He writes a bi-monthly acquisition and divestiture column for Oilman Magazine that has a social reach of an estimated 145,200 views per issue. The best way to reach Mr. Robbins is through email.
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