Leading companies are shrugging off the continued market upheaval and focusing on growth and M&A.

Companies gain strength

We're seeing a new paradigm, with relatively strong M&A activity and market volatility now able to coexist in the oilfield services sector.

Critically, leading companies are shrugging off the continued market upheaval and focusing on growth and M&A. They have spent the past three years reducing the financial risk on their balance sheet and taking tough efficiency measures needed to strengthen their positions, which helps them manage in volatile times.

The value of announced transactions in oilfield services in 2011 was US$37b, 15% higher than in 2010. However, there was an increase of almost 64% in the number of deals in 2011 (177 announced deals) compared to 2010 (108 announced deals).

Deal values and volumes

OFS deals by subsector — 2011OFS value by subsector — 2011Oilfield services deals by region — 2011

Top 10 deals announced during 2011, where values were disclosed

We expect future transaction trends and valuations to be influenced by:

• Geographic footprint and access to growth markets
• Relationships with NOCs
• Technologies that reduce cost, improve performance or enhance access to hydrocarbons
• Health and safety records
• Increased regulation leading to increased inspection and refurbishment and likely earlier replacement of equipment
• Timing and certainty of shale and oil sand developments in North America

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