By OGJ editors
HOUSTON, May 17 -- Nearly one third of oil and natural gas executives in a survey by KPMG LLP expect a high level of merger and acquisition activity in the next 12 months.
Of 384 financial executives polled during March and April, 28% said they expected their companies would be involved in major mergers or acquisitions during the next year.
"When almost 3 in 10 energy executives expect their firms to be involved in a major merger or acquisition, it provides a strong sense of the pressures this industry is facing," said William Kimble, national sector leader for KPMG's energy and chemicals practice.
He said the survey indicated that reserves replacement "is causing much anxiety and upheaval within energy companies."
Survey results showed that 83% of respondents listed declining reserves as a serious concern, and 58% viewed the volatility of oil and gas prices as negative.
When asked about the most significant financial issue, 49% cited cost of materials, supplies, and equipment; 20% said general economic conditions; 7% said rising interest rates; and 7% said labor costs.