Even before the financial crisis and the resulting plunge in oil prices, analysts were predicting a round of mergers and acquisitions in the oil and gas sector amid expectations of new regulations that will raise values of any potential targets.
According to Neil McMahon, senior analyst at Bernstein Research, the sector was undervalued. Even BG Group and Marathon Oil, which have large undeveloped and unbooked positions in Brazil and Angola, respectively, had not been trading at historic multiples, despite high-profile discoveries, he said in a recent report.
