Talks that could lead to oilfield services provider Halliburton Co buying rival Baker Hughes Inc may herald increased deal-making in the energy business as companies bet on a protracted drop in oil prices, industry bankers said. Competing service companies including National Oilwell Varco Inc and Weatherford International may also be targets, bankers and lawyers said. In any deal, the incentives will be the same: consolidation would allow them to better weather the downturn and resist pressure from oil producers to slash prices.The Baker Hughes/Halliburton talks have stalled after the companies weren't able to agree on issues including price, people familiar with the matter said Friday.As oil prices fall, oil field service companies get squeezed, one industry lawyer said. That's because when prices fall far enough, it's no longer economical to get oil out of the ground. If it's too expensive to drill, there's no need to pay an oilfield service company. "The services guys are the last marginal dollar," the lawyer said.While services companies are likely to feel the effect of lower oil prices sooner, overleveraged exploration and production companies may also be pushed to do deals over the medium term, bankers said. Such companies could include Apache Corp, Hess Corp, Marathon Oil Corp or Devon Energy Corp, bankers said.
Apache Corporation (Apache) is an independent energy company, which explores for, develops, and produces natural gas, crude oil, and natural gas liquids. Shares of APA traded higher by 1.78% or $1.28/share to $73.35. In the past year, the shares have traded as low as $69.28 and as high as $104.57. On average, 3399320 shares of APA exchange hands on a given day and today's volume is recorded at 4153452.
Devon Energy Corporation (Devon) is an independent energy company engaged primarily in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs). Shares of DVN traded higher by 1.42% or $0.9/share to $64.18. In the past year, the shares have traded as low as $53.34 and as high as $80.63. On average, 3829410 shares of DVN exchange hands on a given day and today's volume is recorded at 2703419.
Marathon Oil Corporation (Marathon Oil) is an international energy company engaged in exploration and production, oil sands mining and integrated gas with operations in the United States, Angola, Canada, Equatorial Guinea. Shares of MRO traded higher by 1.28% or $0.41/share to $32.36. In the past year, the shares have traded as low as $31.35 and as high as $41.92. On average, 6265030 shares of MRO exchange hands on a given day and today's volume is recorded at 6098723.
National Oilwell Varco, Inc. is a provider of equipment and components used in oil and gas drilling and production operations, oilfield services, and supply chain integration services to the upstream oil and gas industry. Shares of NOV fell by 0.25% or $-0.18/share to $71.34. In the past year, the shares have traded as low as $65.53 and as high as $86.55. On average, 4064630 shares of NOV exchange hands on a given day and today's volume is recorded at 4540272.
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