Oilfield Services Companies Most Active; Need for Investor Appeal Cited
Houston, TX -- (SBWIRE) -- 10/01/2013 -- More than one-in-six energy companies have considered major changes in their company structure, primarily to improve value for investors, a large industry-wide survey by the UHY LLP Certified Public Accountants and PennWell Publishing’s Oil & Gas Financial Journal has found.
The survey, conducted last week and including responses from more than 750 U.S. and international industry executives, showed that while 16% of respondents reported their companies have contemplated a corporate restructuring during the past two years, the rate was 27% -- more than two-thirds higher -- among oilfield services companies. In addition, more than one-in-five downstream (23%) and midstream companies (23%) assessed their restructuring options, as did 15% of upstream companies and 12% of integrated operators.
Almost half (46%) of executives whose companies did move to a different structure reported the reason was to make the company more attractive to potential investors. Approximately one-fourth (26%) cited a need to improve employee or management incentives, followed by improving marketplace perception (21%), and taking advantage of market timing (20%). The primary reasons companies given for choosing not to change structures were lack of appeal to the investment market (40%), and the cost or difficulty of making a structural change (34%).
“To support long-lead-time, capital-intensive extraction, transportation and refining activities, oil and gas companies continually evaluate a wide range of strategic and structural alternatives for providing above-average returns on investment at the lowest cost in a very competitive capital market,” said UHY LLP Audit Partner Scott Barker.
“If a conjunction occurs among the tax and regulatory environment, marketplace dynamics and investor interests and trends, energy companies might seriously consider corporate structures that can help unlock new value for investors and enhance company operations. The best answer is never ‘one size fits all,’ but the companies in this survey that moved to new structures did so because they found their right combination. And other companies will find different combinations in the coming months and years,” Barker added.
A total of 768 oil and gas industry executives participated in the survey. More than one-fourth of the companies represented have revenues in excess of $2 billion, with 60% under $500 million. More than one-third of the respondents work in the upstream segment, with slightly over one-fifth respectively in integrated or oilfield services companies. More than half of the survey respondents’ companies are private entities, and almost one-third are publicly held companies.
Complete survey results are available by emailing firstname.lastname@example.org.
PennWell Corporation is a highly diversified, business-to-business media company providing authoritative print and online publications, conferences and exhibitions, research, databases, online exchanges and information products to strategic global markets. Since 1910, PennWell has embraced a mission of transforming diverse information into practical business intelligence for strategic markets worldwide. PennWell delivers key resources and audiences for your business success in today's global market with a broad portfolio of industry-leading publications, events, e-newsletters and more to provide unparalleled opportunities to grow your business.
Oil & Gas Financial Journal provides global financial decision makers with specific, easily accessible, and essential business intelligence regarding worldwide oil and gas markets, both in the form of content and informative advertising, in a manner that generates value for its readers, advertisers, and stakeholders.
About UHY LLP,
UHY LLP, a licensed independent CPA firm in Texas, performs attest services through an alternative practice structure with UHY Advisors TX, LLC. UHY Advisors TX, LLC conducts operations in Texas as a subsidiary of UHY Advisors, Inc. The firm also has an office in Dallas. UHY Advisors, Inc. and its subsidiary entities have nearly 1,000 professionals providing services from offices throughout the United States. UHY Advisors is ranked as one of the Top 20 professional services firms providing tax and business consulting services in the country by Accounting Today.
UHY Advisors, Inc. and UHY LLP are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. “UHY” is the brand name for the UHY international network. For additional information, please visit their website at http://www.uhy-us.com/.
UHY LLP is a licensed independent CPA firm that performs attest services. UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms.
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