Despite continuing political unrest in Libya, few oil and gas companies active in the country are likely to look to sell their holdings unless the situation remains unresolved for the next month or two, a banker involved in mergers and acquisitions said Monday.
"You won't see a bunch of lemmings jumping off a cliff," Wayne Beninger, a managing director of oil and gas at investment bank Allegiance Capital, said of companies with Libyan assets.
"I don't think you'll see anyone stepping out in the near-term on recent changes," he said, adding that it may take another 30 to 60 days of political uncertainty before companies with oil and gas assets in the country decide to sell them. In such a scenario, deals would likely use a "look-back" clause in which prices reflect pre-crisis levels so "nobody gets all the downside and nobody gets all the upside," Beninger said.
Another market observer said he believes it is too early to say whether companies with Libyan assets might move to take a write-down on them.
"This will play out for months and months," said Fadel Gheit, an analyst at investment bank Oppenheimer. If companies moved to take a write-down now, "then you look like idiots," he said. "You don't declare the patient dead if he's still alive."
Gheit noted that much of the staff of US-based producer Apache Corp., which has operations in Egypt, has returned after being evacuated during political unrest in that country.
Apache CEO Steve Farris said on a February 17 earnings conference said the "general situation in Egypt has improved markedly over the last week," according to a company spokesman. Farris said about one-third of Apache's "expat personnel are already back in Egypt, including most of our field staff."
