Private equity groups and retired oil-and-gas executives are salivating at the chance to get back in the game, said Holt Foster, a partner at Thompson & Knight.
“They see that prices are so low that it’s impossible to sit on the sidelines, and they need to jump in with both feet and take advantage of the distressed assets,” said Foster, who represents private equity funds and portfolio companies and has seen a dramatic increase in activity since oil prices tanked in November.
Houston-based Halliburton and Shell, which has its U.S. subsidiary in Houston, are both shedding redundant assets as part of their respective mergers.
“While commodity prices are tanking, this isn’t nearly the same situation energy companies encountered in 2009. We’ve seen that the banks have been willing to work with people,” said Wes Williams, a partner and the head of the corporate practice group at Thompson & Knight. “It’s different than the last downturn when the banks weren’t lending. Here you’ve still got credit flowing. You’ve got the ability to covenant relief. That prevents you from having to sell those assets in a down market.”