Finding the needle in the haystack

While opportunities are presenting themselves and commodity prices have stabilized somewhat, our survey reveals PE firms are biding their time.

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Early predictions of the oil price decline being short and sharp have been confounded, leaving a number of unsuspecting oil and gas companies in its wake. With these factors in mind, investors are hesitant to invest until they feel the bottom of the cycle has been reached.

Expectations at the start of 2015 were that PE would be increasingly involved in the sector as the year progressed — expectations that have not come to fruition.

However, close to half of respondents (43%) expect PE activity to pick up in the first half of 2017. However, first-mover advantage will be key when debt maturities arise, or the price of oil rebounds. As a result, 30% believe that PE investors will start investing their huge supply of dry powder before the end of 2016.

The expectation is for 2017 to be the year when deal levels return to normal. But, looking ahead, the majority of respondents anticipate PE to play a vital role in the fortunes of oil and gas to come.

EY - Finding the needle in the haystack