Insight

The biggest risks in oil & gas acquisitions? Check the IT department

Some oil & gas assets look like bargains today, but private equity investors face unexpected risks and costs in the IT department

Micky Houston

Micky Houston

Principal, M&A Services, KPMG US

+1 214-675-4166

Patrick Cresap

Patrick Cresap

Director, KPMG LLP

+1 713-828-3982

Craig Cafarelli

Craig Cafarelli

Director, KPMG LLP

+1 617-988-6743

Turmoil in the oil & gas business has triggered a new wave of M&A activity—including private equity firms looking for bargains. But even at attractive valuations, oil & gas assets can come with unexpected risks and high costs.

New owners of carve-out assets typically need to stand up new IT systems quickly, for example, or continue to pay for IT services under costly transition services agreements. In the extreme, shortcomings can prevent timely payments to stakeholders, sparking litigation and even bankruptcy risk.

KPMG helps private equity leaders and other acquirers understand and manage these and other hidden risks before they take the plunge into oil & gas or expand in the sector. In this brief white paper, we share our insights about how to assess critical IT systems before making an offer, prepare for Day 1, and stand up or transition systems after a deal is signed.