:quality(75))
Devon Energy EVP Alan Marcum (snapped with Central Houston’s Bob Eury at Bisnow's Impact of Oil and Gas on Real Estate event yesterday) says his predictions have been off about this downturn so far. It’s been crazier than anyone expected, and two weeks ago, he thought we’d see things pick up. (He thought OPEC had proved its point and would slow supply, but nope.) Supply is outpacing demand by 400,000 barrels per day, so we need to drop production that much before we’ll see balance. But Alan’s an eternal optimist and his team is already capitalizing on opportunities; it recently closed a great acquisition that couldn’t have happened in a stronger market. He thinks we’ll see a rebound around Q3, with oil closing the year around $45/barrel.
Alan’s surprised at the dearth of M&A activity so far—typically down markets have a tremendous number of mergers. He thinks it’s because hostile takeovers really don’t happen anymore. Sales occur when a company agrees to be bought, and no one wants to face how much their value has dropped so quickly.
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