Over the past several years, operators in the mining and oil and gas industries have found it increasingly difficult to fulfill financial guarantee obligations required by government regulators with the typical mechanism of choice, (i.e., surety bonds), because of surety companies' large-scale withdrawal from the natural resources markets. The associated financial credit crunch has prompted mining companies to seek and post alternative forms of collateral.
There has been a great amount of merger and acquisition activity in the oil and gas industry in the last several years, particularly in the last 18 months. Most of the recent activity has been private M&A involving purchases of oil and gas properties, or private oil and gas companies. There have not been many takeovers of
publicly traded oil and gas entities in the last 12 months.