Mergers and acquisitions are all the rage right now. A combination of low interest rates, high corporate cash balances, and a lack of growth are creating an environment ripe for M&A deals. However, one sector has missed much of the boom.

Missing out
The oil and gas sector could be ripe for a surge in M&A deals.

Big Oil companies such as ExxonMobil and Chevron have relatively clean balance sheets and are struggling for organic growth, making bolt-on acquisitions ever more attractive.

Hess (HES 1.22%) has been the subject of takeover speculation before. With a market capitalization of $28 billion, the company could easily fall prey to Chevron or ExxonMobil as a quick bolt-on acquisition to boost growth.

Hess has only made itself more attractive as an acquisition target during the past year as the company has disposed of or spun off non-core low-margin assets. The company has been looking to boost its profits ever since it came under attack from activist hedge fund Elliott Management.

Hess is targeting production of 305,000 to 315,000 barrels of oil equivalent per day during 2014 and is looking to increase output from one of the hottest regions in the oil world right now: the Bakken. Additionally, Hess is overseeing the start up of the Tubular Bells oil field in the Gulf of Mexico, a joint venture with Chevron that is currently slated to begin production during the third quarter of 2014.

Ramping up high-quality production
Hess' has other attractive qualities include the company's production, which is expected to expand 5% to 8% per annum through to 2017, off of an industry-leading oil-linked asset base where 80% of the company's reserves are crude oil and natural gas liquids. What's more, Hess' cash margin of per barrel of oil produced came in at an average $36.9 during the four years from 2009 to 2013; this margin hit $49 per barrel during 2013 and became the industry's widest.

So, Hess has some industry-leading qualities, and the company would be an attractive acquisitions for any suitor. However, one company that has stood out is Norway's Statoil (EQNR -0.66%).

Looking to diversify
Statoil told investors earlier this year that the company was considering major acquisitions as it wants to reduce its focus on Norway. It seems as if Hess would make a good acquisition, and the two companies have been linked in the past.

Hess has some attractive assets that would allow Statoil to diversify outside of Norway. For example, Hess owns part of the Valhall/South Arne project off Norway, along with assets in Ghana, the Bakken, and Gulf of Mexico as mentioned above. An acquisition of Hess would give Statoil a selection of assets around the world with high margins and potential for growth.

Statoil has already entered the Bakken region through the acquisition of Brigham Exploration Company for approximately $4.4 billion back during 2011. The transaction gave Statoil more than 400,000 acres with a risked resource base estimated at 300 million-500 million barrels of oil equivalent. The acreage has potential to produce up to 60,000-100,000 barrels per day.

Hess' presence within the Bakken region would complement Statoil's existing presence and allow the companies to work some cost saving synergies from the deal. Indeed, Hess' Tioga gas plant has allowed the company to increase production within the region, and the company's current Bakken production is expected to average between 80,000-90,000 boepd in 2014.

Hess has also been working on lowering drilling and completion costs in the Bakken region. First-quarter Bakken drilling and completion costs fell 13% year over year to an average of $7.5 million per well. It goes without saying that this could benefit Statoil and help the company realize lower cost production and exploration from its existing acquired Bakken acreage.

Foolish summary
Hess is a leading independent oil exploration and production company. For this reason, it could become a takeover target for larger peers seeking to boost flagging production rates.

One of Hess' possible suitors is Statoil, which is looking to diversify outside of its home country, Norway. Hess and Statoil have been linked before, and a merger could create some impressive synergies. Overall, Hess could be a possible M&A target to watch.