Wannabe dealmakers in the oil industry are stymied by a fundamental problem: there’s a mismatch between the price of crude and the value of companies. Oil’s slump prompted speculation that explorers and producers, collectively known as E&Ps, were on the cusp of an acquisitions boom as many of the smaller companies burned through cash. That’s unlikely with crude languishing below $50 a barrel, according to research from FirstEnergy Capital LLP. “Many names among the E&Ps require a much higher oil price than $60 a barrel to justify their valuation and you won’t have a transaction if you don’t pay a premium to the share price,” Stephane Foucaud, an analyst at FirstEnergy in...
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