M&A, page-4

I think you're all right that we will start seeing more and more M&A's in the coming 2 years, but not for the reasons everyone is mentioning.

O&G companies have 3 ways that they can replace reserves... Exploration, acquisitions, and enhanced recover through technology. What we have seen in 2015 & 2016, with the reduction in budgets, is a sharp decline in exploration dollars being spent by the super majors, and majors. This will caulse their reserve replacement numbers so start to slide toward 100% or lower. This will create a knee jerk, to try and boost these numbers back to around 105-107%.

Exploration is the slowest way to replace reserves, so you will see a spike in acquisitions to balance the reserves in the short term, while they get exploration programs going. I guess the point I'm making, is simply that the cheap state of the industry may not be the key driver for many of the M&A activities.