Upstream exploration and production companies are now being forced to look at tougher strategies to weather the storm as they brace for a short-term outlook of lingering low oil.

The obvious first place to start is lowering the cost base.

Job losses have been widespread throughout the sector, as has the deferral of non-essential capital spending - particularly on growth projects.

Contracting methodologies are showing more flexibility to allow walk-away outcomes and greater price and risk exposure for contractors. Most contracts that are up for renewal are being renegotiated, not just to reflect downward price pressure but also for such flexibility and risk exposure.

We are also seeing disputes on the rise, with parties opting to pursue dispute avenues where funds can be clawed back or commercial outcomes maximised.

In terms of financing, low commodity prices make it challenging for all but the strongest exploration and production companies or highest quality (and lowest cost base) projects to access financing on competitive terms. The recent ratings downgrades affecting many E&P companies exacerbate the challenge.

Equity markets are showing similar challenges, and other than a number of deeply discounted capital raisings in the sector towards the end of 2015 - with participants in a number of those raisings facing losses - raising significant new equity continues to be challenging in the current climate.

We are expecting the M&A market to be interesting and expansive as the year continues. The climate raises opportunities associated with distressed asset sales across the sector as well as potential "bargain" or strategic opportunities for E&P companies with bigger pockets and a strategic eye towards the scenario of oil price recovery in the medium term.

We are also expecting to see more innovation and collaboration as the market adjusts to the scenario.

E&P companies and contractors are enthusiastically looking at technical improvements and innovation aimed at increasing efficiency and reducing costs. From a legal perspective, maintaining confidentiality and protecting intellectual property in these innovations will continue to be important.

Collaborative opportunities continue to emerge, such as tie-ins, asset swaps and infrastructure sharing and infrastructure divestment (whilst retaining infrastructure throughput for a fee).

While the challenge for these opportunities is often giving up an element of control, the prize can be a more cost effective outcome and freeing up capital. The key to most of these collaborative opportunities is having a robust legal framework to ensure sufficient rights are maintained.

Overall, we are expecting an interesting year ahead with the industry striving to be "match-fit" for the inevitable recovery, whenever that may be.