A report by Citigroup Global Markets analyst Robin Shoemaker published today says the oil and natural gas services sector is ripe for consolidation and identifies several firms that could be takeover targets. Shoemaker said rising oil prices, which are a reliable indicator of industry consolidation, could lead to further mergers and acquisitions activity in the group.
Nine transactions with a total value of $13 billion took place in the first quarter, according to the Associated Press. Shoemaker said $8 billion to $13 billion in deals could be seen in the service group on a per quarter basis through the rest of this year. The analyst anticipates more stock deals than cash deals, the AP reported.
Firms Shoemaker identified as possible takeover targets include Dresser-Rand (DRC), the maker of rotating equipment for oil and gas producers, FMC Technologies (FMC) and Superior Energy Services (SPN).
Shoemaker also noted that drilling services providers Helmerich & Payne (HP), Rowan (RDC) and Weatherford International (WFT) could be targets as well. The analyst's report did not specifically highlight firms that would be potential acquirers of the companies mentioned as targets.
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