The macroeconomic context provides plenty of reasons to be optimistic about the deal pipeline in 2013.
Global exploration and production spending is estimated to rise by 10% and the oilfield service sector, which performed well last year, will continue to grow.
The North Sea outlook is very promising, with high levels of activity and planned projects moving out to 2015 and beyond. This is probably the best visibility we have seen in a generation.
Combined with the fact that we are getting farther away from the financial meltdown of 2008, this all makes for a settled and positive environment that should boost deal flow.
Deal activity was relatively strong across the board in 2012.
At Simmons, we completed slightly fewer deals than in previous years but the transaction values were considerably higher.
Trade and financial buyers were active in the deal arena and, with a sustained high oil price and robust oil service sector, it was no surprise that interest from non-industry specialists – both on the trade and financial side – was significant.
There was one consistent theme, which was the need for tenacity and persistence to get deals over the line.
Availability of debt remains a challenge as the banks continue to adjust to the post-2008 era, while issues around diligence and financing are a challenge in almost every deal.
Across the board, deals seemed to take longer last year. They also hit more speed bumps than usual along the way, with some even falling at the final hurdle.
In part, this can be put down to the increasing numbers of generalist buyers in transactions in the oil and gas service space.
The stellar performance of this sector, compared with others, has attracted large industrial buyers and financial institutions who either want to move into oil and gas for the first time or significantly increase their exposure to it.
While this must generally be welcomed, it brings its own challenges as non-specialists can struggle to balance what they are seeing in oil and gas with what they are experiencing in other sectors.
As a consequence, they find it hard to justify paying what can be perceived internally as a premium when the overall economic climate has been more doom and gloom than boom.
In this environment, good advisers who can balance sector expertise with transaction experience to help get buyers over the line can make a difference in completing transactions.