TheGlobe&Mail.com
Peak oil at the boardroom table
The impasse between oil-patch buyers and sellers may have been broken Monday when Royal Dutch Shell agreed to pay up (waaaay up) for Duvernay Oil, but now a debate is starting about what that means for the price outlook for energy.
One of the reasons that patch M&A has been relatively quiet even as prices rocketed higher is that there was a mismatch between the forecasts of sellers, which were overwhelmingly that oil and gas were headed further into the stratosphere, and buyers, who weren’t so sure commodities might not come crashing down and put oil closer to $100 a barrel.
Some dealmakers will tell you that it’s the hardest to agree on price and get a buyout done when any commodity reaches a potential top for precisely that reason. It’s much easier to find common ground just before the peak and just after. So with Shell agreeing to pay a hefty 42 per cent premium for Duvernay, the debate is now on: Does that signal that the buyers have come around to the sellers’ way of thinking? And if so are we just before the peak or just after?
