Declining Oil Prices = Decline in Oil Patch M&A

© 2014 The Texas Lawbook.By Mark Curriden – (November 4) – The rapidly declining price of oil is having a negative impact on mergers, acquisitions and joint ventures in the oil patch. Industry insiders say that if crude prices continue to fall and then stay below $75 a barrel for an extended period of time, some highly leveraged energy companies will be forced to sell assets at fire sale prices in order to raise cash. More than a dozen Texas-based energy M&A lawyers and investment bankers say they have personally witnessed one or more proposed deals halted during the past two weeks because of the uncertainty about the future price of crude or the drop in the stock price of one of the oil and gas companies involved in the proposed transactions. M&A in Texas – fueled by a nearly unquenchable thirst for investment in the oil and gas sector – was on a record pace during the first three quarters of 2014. But new deals in the pipeline started slowing dramatically during the past few weeks. Lawyers and investment bankers say the shift, which most of them describe at this point as a “pause,” came just as oil prices…