Brunswick Group

U.S. Oil and Gas M&A Survey April 2015

Summary

• Brunswick surveyed 105 people, including bankers, lawyers, private equity investors, analysts and investment

managers specializing in the energy sector.

• Overall, more than half of respondents anticipate an increase in M&A activity in the U.S. oil and gas sector in 2015.

Driving factors include further decline in global oil prices and a desire to reduce operating costs through deal

synergies.

• Corporate deal makers and the investment community have differing opinions around the timing of any M&A

activity: More than two-thirds of the investment community (68% of analysts and investment managers) expects a

greater number of deals this year than in 2014, while most deal advisors surveyed (80% of the bankers and lawyers)

believe that 2015 will not be an active M&A year.

• Respondents believe that domestic transactions by strategic buyers in the services and upstream segments

will be the main focus of deal activity in 2015.

• U.S. oil and gas industry likely to arouse interest from Asian, European and Middle Eastern buyers.

• Nearly two-thirds of respondents see activist investors playing a driving role in M&A in the oil and gas sector.

Key Findings

Q: In 2015, do you expect the level of M&A activity in the U.S oil and gas sector to…

More than half (52%) of respondents feel that the level of M&A activity in the U.S. oil and gas sector will increase over the next year

34%

14%

52% Increase

Stay the Same

Decrease

Q: In 2015, do you expect the level of corporate spinoffs and divestitures in the U.S. oil and gas sector to…

The level of corporate spinoffs and divestitures is expected to increase in 2015

34%

20%

46% Increase

Stay the Same

Decrease

Q: What types of deals do you expect to drive M&A activity in the U.S. oil and gas sector in 2015?

Respondents feel that domestic transactions among strategic buyers will dominate the deals taking place in the oil and gas sector in 2015

78%

19% 16%

Domestic transactions among strategicbuyers

Foreign acquirers into the U.S. U.S. acquirer outside of the U.S.

Percentages add up to more than 100% as the above was a multiple-response question

53%

48%

25%

16%

13%

Further decline in global oil prices

Operational synergies

Shareholder activism / pressure from investors

An increase in global oil prices

More cash on balance sheets

Q: What are the key factors that will drive oil and gas sector M&A in 2015?

The further decline in global oil prices coupled with operational synergies are seen as the key factors driving oil and gas M&A in 2015

Percentages add up to more than 100% as the above was a multiple-response question

Q: Which of the following segments of the oil and gas sector do you expect to be the main targets for M&A in 2015?

Services segment likely to be the main focus for M&A

49%

31%

30%

27%

15%

10%

Services

Upstream

Infrastructure

Midstream

Integrated Majors

Downstream

Percentages add up to more than 100% as the above was a multiple-response question

Q: From what region do you anticipate the most foreign acquirers into the U.S. oil and gas sector to come in 2015?

Asia, Europe and the Middle East are key regions for foreign acquirers

17%

22% 50%

Q: In 2015, which of the following types of buyers do you expect do be most active in M&A in the U.S. oil and gas sector?

Strategic buyers are expected to be the most active in the U.S. oil and gas sector

53%

45%

36%

18%

11%

Strategic buyers

Private equity

Industry / corporates

Hedge funds

Sovereign wealth funds

Percentages add up to more than 100% as the above was a multiple-response question

Q: Do you expect to see activity in Master Limited Partnership transactions and new equity listings in 2015….

/ In 2015, do you expect to see more deals using….

Master Limited Partnership transactions and new equity listings over the next year are expected to decrease; deals will more often than not use a mix of cash and stock.

63% say will

decrease 9% 13%

79%

All stockAll cashA mix of cash andstock

Percentages add up to more than 100% as the above was a multiple-response question

Q: In 2015, do you see activist investors playing an active role in driving M&A activity?

/ In which segments of the sector do you see activists being most active?

Finally, activist investors are here to stay with respondents seeing

them playing an ongoing role in M&A in 2015

42%

34%

28%

22%

14%

14%

Services

Upstream

Infrastructure

Integrated majors

Midstream

Downstream

63%

37%

Yes No

Percentages add up to more than 100% as the above was a multiple-response question

About Brunswick

• Brunswick Group is a leading financial and corporate communications consultancy with 23 offices across the

Americas, Europe, Africa, Middle East and Asia.

• In 2014, Brunswick ranked first in the M&A league tables globally for public relations advisors, working on 152

deals worth a combined $435 billion, according to Mergermarket data.

• In energy, the firm advises companies active in all verticals of the sector and across a range of disciplines including

M&A, restructuring, media engagement and investor relations.

• Energy clients include: Amec Foster Wheeler; BP; BG Group; Chevron; Kosmos Energy; Occidental Petroleum

Corporation and Sinopec.

© BRUNSWICK | 2015 | 14

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