Could this be the year for oil takeovers?

Low oil prices could spur further mergers and acquisitions (M&A) across the oil and gas sector in 2016, analysts told CNBC.

Speaking to CNBC on Tuesday, Karri Vuori, head of M&A at Panmure Gordon said that alongside healthcare and advertising technology, oil and gas is one of the top sectors to watch in terms of M&A deals this year.

Landscape of oil refinery industry
Anek Suwannaphoom | Getty Images

"The juniors can't support their asset bases anymore, their balance sheets aren't looking very strong," Vuori said.

It comes as oil prices continue to fall amid a supply glut that has shaken energy firms across the globe. Brent crude prices are down over 33 percent over the past 12 months and were sitting around $37.17 per barrel by mid-day London trade. U.S. benchmark WTI prices are close behind, down over 30 percent over the past 12 months, near $36.75 per barrel.


Most companies were able to hold out through the price troughs of 2015, Jefferies equity analyst Jason Gammel said, but 2016 could set the backdrop for further acquisitions by year-end.

"Smaller companies have been able to maintain balance sheet flexibility, but this could erode," Gammel told CNBC in a phone interview.

But the first three months of the year could be the biggest hurdle for the small companies to clear, Abhishek Deshpande, an oil markets analyst at Natixis, explained.

Whereas many companies might have been able to extend their credit lines back in October, the extended oil price rout has added pressure onto firms who were already struggling.

"Particularly with oil prices hitting lows at some point in the first quarter...lots of sub investment-grade firms could be under a lot of stress, and for those with stronger balance sheets, those companies could take this as an opportunity to buy and acquire assets," Deshpande said in a phone interview.

Deshpande forecast Brent prices will stay around $39 per barrel in the first quarter, but with prices rising to $56 by the end of the year, to average around $47.80 for 2016.

"You should see a lot of these companies under pressure in 2016," Deshpande said.