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Rocky Mountain region sees decline in oil and gas mergers


Mergers and acquisitions -- also known as M&A -- are essential to economic progress in a capitalist society. Generally, the term "mergers and acquisitions" refers to the consolidation of companies either through the combination of two separate entities to form a new, single company or the purchase of one company by another company in order to incorporate it into an existing entity. M&A activity is often viewed as a sign of economic health.

According to PricewaterhouseCoopers LLP, the value of oil and gas mergers in Colorado and the bordering Rocky Mountain region declined in 2013. The Rocky Mountain region includes Colorado, Utah, North Dakota and Wyoming. According to the firm, mergers and acquisitions in the oil and gas industry dropped more than 30 percent in the Rocky Mountain Region between 2012 and 2013 from $22.8 billion to $15.6 billion. The recent report suggests that deal value declined in the lucrative Niobrara shale formation, which spans Northern Colorado, as well. Total deal value in 2013 was just over $1 billion, while in 2012 deal value was around $4 billion. According to a Denver-based partner of PricewaterhouseCoopers the decline was due to companies focusing efforts on growth through activities like drilling rather than mergers and acquisitions.

Growth is essential to the life and success of a business. While there are a number of ways for businesses to achieve growth, if one's business goals include growth through a potential merger or acquisition it may be time to consult with a business attorney. Mergers and acquisitions are complex business transactions; even in a friendly acquisition, getting it right is vital to one's future success.

Source: Northern Colorado Business Report, "Oil and gas merger activity declines in 2013," Steve Lynn, Jan. 28, 2014

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