GlobalData's head of oil and gas research and consulting Matthew Jurecky said voluntary oil production cuts to support oil prices had been ruled out in favour of a process of natural selection to correct the market.

Jurecky said the most efficient producers would be left standing as growth slowed, companies cut capital budgets and reduced employee numbers.

Those with financial obligations greater than cashflow from operations - especially those that had depended on debt for growth - will become increasingly distressed. These companies will ultimately be forced to either sell assets or seek an outright buyer to avoid bankruptcy.

"The impact of low prices will be felt across the entire value chain," he said.

"Profit margins for equipment manufacturers and services providers are being squeezed. Producers fighting for survival will try negotiating price cuts or opt out of contracts to prolong production and cash flows.

"Margins for service companies will fall and those unable to compete and operate profitably will require strategic options. Companies heavily exposed to emerging or speculative production areas counting on future growth are vulnerable, whether pipeline operators or service companies.

"The more prolonged the period of low oil prices, the more exposed companies will be.

He said that while efficient operators would survive, those with limited long-term planning would falter and become targets.

"Companies with uncommitted capital are presented an opportunity to expand market share and non-industry speculators have a strong entry opportunity, particularly financiers and those interested in distressed debt," Jurecky said.

"Strong profits had been fuelling the mergers and acquisitions market, but value awaits patient contrarians now able to buy when the market is at its lowest and confusion reigns.

"Asset values have collapsed and now is the optimal time to acquire. Buyers benefit from asset values appreciating in the long term as prices rise over the years.

"The fruits of planning will be lower debt obligations and cash reserves that support companies through years of low oil prices and also provide for acquisitions, without stressing balance sheets," he said.

"Looking for options will be those that have found their cash reserves depleted and those that have depended upon debt to fund operations above and beyond cash flow."

Jurecky said industry would do well to learn from previous oil price crashes: "It would be an opportunity lost should the environment not be exploited, as international oil companies (IOC) are moving into the next decade with fewer greenfield opportunities and increased competition from national oil companies (NOC)" which were increasingly taking control of domestic resources.

"This is resulting in fewer exploration opportunities for IOCs, meaning they will need strategic inorganic opportunities to replace reserves and grow production.

"IOCs with similar objectives, shared vendor relationships, and complementary asset portfolios would see significant operational synergies from mergers and be more efficient to compete in the post-price crash world.

"Those with heavy debt obligations will find the next year challenging, as the low price environment lasts longer than hedging programs covered for.

"Pure-play operators with the strongest positions will snap up smaller operators to gain market share. This is especially true in the US shale plays, where there is heavy competition and low barriers to entry have allowed for many smaller operators," he said.