A good article in the AFR this morning and guess who is...

A good article in the AFR this morning and guess who is mentioned.

In short, the article states that 2017 is to be the year of mergers and acquisitions where cashed-up players such as Macquarie Bank look to get most bang for their buck in an environment of firming oil prices, according to the experts.

It would seem that Mergers and acquisitions will offer an attractive value proposition for the financially strong prepared to take a bullish view on long-term prices on the back of cautious, U-shaped recovery in investment in the sector.

With strengthening oil and gas prices, this should set a backdrop for potential M&A because you've got a couple of ways to grow: you spend money on drilling and exploring or you look to buy producers and assets that are undervalued by the market.

The article further states that in Australia the scene is set for a busy year for deals, with Santos in sale mode for non-core assets and Origin Energy proposing a float of its non-LNG oil and gas business. Macquarie Capital is nosing around exploration junior Central Petroleum while Karoon Gas is hoping for a resurrection of its ambitions to buy two oil assets from Brazilian national oil player Petrobras, a process that has been stalled by a legal challenge.

It would seem the greater the procrastination in chasing desired M&A targets, the greater the opportunity the minnows will slip the clutches of the sacred up and ride the strength of the oil prices that should challenge $68 by year ending.

Central does afford a calculated risk vs reward status for those willing to take an educated punt. One thing is for sure, the race is on for the cashed up to buy before opportunities become a thing of the past leading into year 2018.