THE deepening of the eurozone crisis and fears for the US economy sent world stock markets into retreat in late July and this continued into early August with the FTSE 100 dropping almost 1,000 points to its lowest level for over a year.
Against this negative backdrop, which had a knock-on impact on the oil price, companies operating across the oil and gas industry posted strong half-year results and although substantial share price declines were evident across all market sectors, recent upward revisions to E&P capex budgets and strong project backlogs indicate a positive outlook for the industry.
Significant announcements in the month came from E&P operators and service companies alike.
BG reported significant progress in key growth regions including Brazil and Australia, accompanied by a 27% increase in earnings versus 2010. Impressive results were also reported by both Tullow and Cairn, both delivering year-on-year revenue growth of well over 100% on the back of strong production and a stable oil price.
On the oil service side, Wood Group, Amec and Petrofac all delivered earnings growth in H1 2011 and Petrofac commented that the business remains on track to double 2010 revenues by 2015. However Hunting was the stand out performer, almost doubling pre-tax profits as a result of sustained shale drilling activity in North America and the resurgence of deep water offshore drilling.
DEAL activity remained high in August, with the announcement of four key deals for Simmons.
Hunting, advised by Simmons, acquired Dearborn Precision Tubular Products for $83.5m and agreed to acquire Titan Specialists for $775m. The Titan deal is expected to close in September.
Simmons advised the shareholders of SMT, a leading provider of geophysical and geological interpretation software, on its acquisition by IHS in a $500m transaction.
Further afield, Simmons represented Australia-based engineering group Clough on the divestment of its Marine Construction division, which is to be acquired by the Malaysian oil and gas contractor Sapuracrest for A$127m. The deal was announced on August 8 and is expected to complete in the coming weeks.
August also saw the launch of Simmons’ new website. Visit www.simmonsco-intl.com to keep up to date with our latest news and transactions.