ADVERTISING FEATURE SEPTEMBER 2019
The North Sea in 2019 - an era of transition? By Alasdair Green,
head of E&P strategy, Anderson Anderson & Brown LLP NEW levels of North Sea upstream deal activity in 2019 are giving us many reasons to be positive and optimistic about the future of this basin.
also seeing larger companies such as CalEnergy Resources, INEOS, Equinor and Shell increasing their positions.
Following a period of uncertainty for all of us in the sector, no one can deny now that favourable conditions and levels of attractiveness are reaching new highs. The deals we are seeing range across the spectrum in terms of scale. At the higher end, there are inspiring examples of belief and confidence in the North Sea, such as Ithaca’s acquisition of Chevron UK, Rockrose acquiring Marathon Oil’s North Sea assets, Chrysaor’s ongoing growth through buying the UK ConocoPhillips business – and most recently Energean’s acquisition of Edison E&P, giving them a North Sea position and the Petrogas / NEO deal with Total. Further down the scale, there are similar levels of activity from businesses buying into development opportunities. Active players include relative newcomers Talon Petroleum and Corallian Energy; and we are
Behind this there are increasing levels of activity from aspiring management teams who have acquired assets or licences and who are working up plans to execute new North Sea strategies.
they have everything regarding a business transition covered off. They might think they are aware of all the tasks necessary. Items that are sometime major and critical to success can be missed however and these suddenly become centre of attention at a later stage and greater expense than is necessary.
Many of the larger deals follow the trend of ‘smaller company acquires much larger entity’. What is crucially important is the successful delivery not only of the deal transaction but also the business transition. Handled badly, it can create uncertainty, can put careers at risk, drive up unnecessary costs and time delays; and depreciate investor confidence.
Lacking transition experience or firepower does not necessarily mean that a business needs to hire new staff in order to complete the project. This can be potentially unfavourable for both parties if the deal is still to complete. This is where experienced consultants and advisory firms can add value in filling crucial gaps from as early in the process as possible.
An early question needs to address the acquiring company’s capability of executing the work. How strong is the leadership? What experience does the in-house team have? Do they have the capacity to take on extra workload that is time pressured and potentially complex?
At AAB, our specialist E&P team offers recent hands-on experience, knowledge and tested methodologies in many aspects of North Sea upstream transaction and transition support and management. Our advisory and outsourced solutions span payroll and benefits, full lifecycle accounting, tax and consulting services.
Quite often, a team understandably has the confidence in believing that
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