Energy Industry to Remain Volatile for Another Year

 Energy Industry to Remain Volatile for Another Year
By Pat Niekamp

The energy picture in Texas is an ugly one according to data released by KPMG.

At a Houston media roundtable, KPMG’s 2016 Energy Business Outlook compiled data from 150 company executives.

Among the survey results:

  • It will be another year before the price of crude stabilizes – the spring of 2017
  • 92 percent say it’s likely their company will be involved in a merger or an acquisition in the next two years
  • 94 percent say it’s likely their operating model will be changed in the next three to five years
  • 88 percent estimate the price of Brent Crude will remain below $50 for the year
  • 73 percent see headcounts flat or decreasing over the next two years
  • 67 percent have completed or are launching a business transformation initiative

In the discussion with KPMG oil & gas sector specialists, partner Michiel Soeting said, “Companies are getting to the point of making big decisions.” Very big decisions – like do we buy or do we sell; do we go bankrupt, can we develop a strategy to stay in business?

Energy companies will be looking at reducing their cost structures, increasing cash flow, and focusing on growth.

It looks like the disruptive forces are not yet done with oil & gas in Texas.

Pat Niekamp is the publisher of Texas CEO Magazine.


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