for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Energy

Citigroup hires quartet, eyeing recovery in energy land deals

FILE PHOTO: The Citigroup Inc (Citi) logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. Picture taken October 19, 2017. REUTERS/Chris Helgren

NEW YORK (Reuters) - Citigroup Inc C.N said Friday it hired four bankers to work on the buying and selling of oil and gas acreage, betting the dislocation in commodity markets in 2020 will yield more land deals among energy producers.

The quartet is led by Tony Fernandez, previously with boutique investment bank Intrepid Financial Partners, and also includes two hires from Jefferies Financial Group JEF.N and another former Intrepid banker, according to a Citi statement.

The pace of mergers and acquisitions in the U.S. oil and gas sector has been the worst in a decade, according to data provider Enverus, as most shale producers remain reluctant to spend after an oil price crash earlier this year.

While the market for land deals - known in the industry as acquisitions and divestitures (A&D) - has remained weak as firms eschew growth, some producer tie-ups have happened in the last few weeks, as companies seek scale to reduce costs.

More A&D deals could happen in 2021 though. Exxon Mobil Corp XOM.N said last month it was evaluating whether to sell natural gas holdings in North America as it grapples with market conditions. BP PLC BP.L wants to remake itself as a green energy company, which will require shrinking its oil and gas business over time.

“The sector has entered into consolidation phase and the A&D activity will likely pick up in 2021 as companies seek to deleverage, the energy market stabilizes and improves, and companies seek to divest of non-core assets post consolidation,” said Stephen Trauber, global head of energy at Citi.

Reporting by David French; Editing by David Gregorio

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up