Thoughts on M&A in 2011

• With only a modest growth in gas prices predicted, gas weighted assets are likely continue to change hands in the US at large discounts to equivalent liquids assets during 2011.
• Smaller gas focused companies in the US may have to consolidate or risk being acquired by their larger peers who can afford to take a longer view on gas price projections
• Shale plays in Europe may start to attract larger investments if resources are proved to be abundant and economic (although this prediction could be one year too early)
• Oil sands M&A has been quiet in recent years since the credit crisis and consequent drop in the oil price, this sector may be revived if the oil price continues to trade at current levels
• Indian NOC’s will start to expand further overseas following the country’s sustained economic growth which has driven up the country’s demand for oil.
• Foreign oil acquisitions from Chinese companies is likely to continue as the country looks to further secure long term oil security
• Other M&A hotspots are likely to develop over the year where and when positive exploration results from new frontier areas come through, i.e. Greenland, Falklands, undeveloped African countries and new or extensions to US and Canadian plays such as the Alberta Bakken

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