M&A in the energy sector

The falling oil price has been a hot topic through the course of 2015. Most recently the sector has been thrust into the spotlight as corporate activity in Australia heats up. A bid from Woodside for Oil Search has highlighted the value some industry players are seeing at current levels, especially for prized assets such as those owned by Oil Search. Tom Richardson from Watermark Funds says the longer term outlook for energy prices remains clouded as market analysts grapple with the impacts of the relatively new shale industry. "That has been the most fascinating story here over the last 12 months. The US shale is clearly the disruptor to this market and people had expectations that they wouldn't survive at $70 per barrel and then at $60 per barrel. And just in the last year we have seen the industry reduce their costs by another $10 per barrel." Richardson explains that the lack of understanding and visibility on this new source of supply will see oil prices remain under pressure. Watch the full interview here: