• 7 minutes Get First Access To The Oilprice App!
  • 11 minutes Japanese Refiners Load First Iran Oil Cargo Since U.S. Sanctions
  • 13 minutes Oil prices forecast
  • 17 minutes Renewables in US Set for Fast Growth
  • 8 hours Chinese FDI in U.S. Drops 90%: America's Clueless Tech Entrepreneurs
  • 5 hours Socialists want to exorcise the O&G demon by 2030
  • 1 hour Russian Message: Oil Price War With U.S. Would Be Too Costly
  • 11 hours Good Marriage And Bad Divorce: Germany's Merkel Wants Britain and EU To Divorce On Good Terms
  • 23 hours Cheermongering about O&G in 2019
  • 48 mins Oil CEOs See Market Rebalancing as Outlook Blurred by China Risk
  • 2 days Is Natural Gas Renewable? I say yes it is.
  • 1 day Duterte's New Madness: Philippine Senators Oppose President's Push To Lower Criminal Age To 9
  • 2 days North Sea Rocks Could Store Months Of Renewable Energy
  • 15 hours *Happy Dance* ... U.S. Shale Oil Slowdown
  • 2 days Making Fun of EV Owners: ICE-ing Trend?
  • 2 days Emissions from wear of brakes and tyres likely to be higher in supposedly clean vehicles, experts warn
  • 5 hours WSJ: Gun Ownership on Rise in Europe After Terror Attacks, Sexual Assaults

A Rare Opportunity For Yield And Growth

When the whole energy sector was being hit hard at the end of last year, as oil prices collapsed, it became clear that at some point consolidation was inevitable. Heavily indebted companies needed cash as the potential cash flow from investments sunk which created an opportunity for those with the room and the guts to take big risks. Given that environment, the number of actual buyout deals announced in the oil and gas industry so far has been quite low.

What there has been, though, is a significant amount of transfers of individual assets, as companies look to raise cash and renew focus at the same time. Deals such as that are usually beneficial to the seller of the asset, but the value to the buyer often cannot be seen for several years. Occasionally though, along comes a deal that offers almost immediate, measurable benefits to the buyer, and the acquisition of the Grand Isle Gathering System (GIGS)by CorEnergy Infrastructure Trust (CORR) that was announced this week is one of them. The GIGS is a network of 153 miles of undersea pipes that service the shallower portions of the Gulf of Mexico oilfield.

The transaction makes sense for the seller Energy XXI (EXXI), an oil and gas exploration and production company that has been struggling with a large debt load. Diversifying into a midstream, fee-based oil service project made perfect sense for the company when prices were high, but now that the crunch is being felt, and capital expenditure needs are piling up,…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin



Oilprice - The No. 1 Source for Oil & Energy News