BDO LLP | August 25th, 2015 | Middlemarketgrowth.org
Over the past decade, the international oil & gas industry has enjoyed unprecedented growth and prosperity. The renaissance of North American energy production has introduced abundant new supply to the global market, promising to meet rapidly-growing demand and loosening OPEC’s tight grip on the industry.
In the midst of these boom times, middle market companies have seen some of the greatest success in exploiting new energy resources and capitalising on global appetite for inexpensive supply. According to BDO’s 2015 Global Energy Middle Market Monitor, middle market exploration and production (E&P) companies saw their median daily production grow by 50 percent between 2012 and 2014, accompanied by a near-doubling of revenue—from a median of $78 million in 2012 to $152 million by the end of 2014. Indeed, the robustness of this growth has largely helped shield the middle market from the worst effects of ongoing malaise in the commodities markets, with median exploration and production expenditures as a proportion of revenue declining by 14 percent and 12 percent, respectively, over the past three years.
“A new order for the global oil & gas industry has emerged over the past decade as innovation unseated conventional resources and propelled new entrants to the market to the fore,” said Charles Dewhurst, Global Leader of the Natural Resources industry group at BDO. “Middle market companies have been some of the greatest beneficiaries of this paradigm shift, and with some smart planning, could be poised to emerge from the past year’s commodity price drop stronger than ever.”