This past month, we attended the Total Energy USA conference here in Houston, and one of the most interesting sessions included speaker Alexandra Pruner CFO, Tudor, Pickering, Holt & Co. on the topic of dealing with financial uncertainty for energy companies. Pruner shared some interesting predictions for 2013 that are worth passing on:
- Consolidation is the name of the game for the new year. M&A and more specifically Master Limited Partnerships (MLP) will allow cash and resource strapped companies to combine forces and improve the bottom line.
- More companies will be going public, also to generate needed cash.
- The dollars are there for investing in M&A or stock, as Pruner estimated there is somewhere near 25 billion in “dry powder” or private equity funds that have not been invested yet.
- Rig counts will flatten as energy companies shift their efforts to completions and getting more out of the wells they already have.