Low cost capital, compelling valuations and building evidence on the ground that a bottom is in, or at least very close: Those are the necessary conditions for a resurgence of mergers and acquisitions activity in the energy sector.

At this point, cost of equity capital is high even for best in class companies. Debt capital, however, is a far different story. Model Portfolio member’s ExxonMobil (NYSE: XOM) bonds of April 2051 yield just 2.9 percent to maturity, while Williams Companies’ (NYSE: WMB) May 2050 bonds yield less than 3.7 percent. And private capital has rarely if ever been this flush.

As for energy stock valuations, they’ve arguably never been more compelling. What’s been missing is a compelling rationale that a sector recovery is imminent after the carnage of the past year.