Noncore Properties Drive Increased Activity In Upstream Deal Making By Chris Atherton HOUSTON-The acquisition and divestiture market for oil and gas assets is in constant flux. In normal markets, the factors that motivate oil and gas property owners to sell assets are as varied as there are sellers. However, after several months of depressed commodity prices, the unfortunate reality in today's market is that debt, solvency and survival will be motivating factors for owners of assets to sell in the second half of 2016 and into 2017. The good news is that buyers are well capitalized and looking aggressively for acquisition opportunities. There is an eagerness to acquire assets with significant upside reward, but there also is trepidation that prices could slip again. Not only do potential sellers have to determine what and when to sell, but the options of how to sell have become more critical to achieving true maximum market value, as well as achieving certainty of close. Since no property owner wants to sell at the low point in a cycle, the moderate recovery of oil prices from the levels experienced in the first quarter may further encourage buyers and sellers to come together at the transaction table. It also gives buyers better opportunities to lock in hedges to ensure minimal rates of return on acquired properties. MAY 2016 33