News agency Reuters is reporting that the oil price slump witnessed in 2015 will loom large over 2016 as: “Global oil and gas investments are expected to fall to their lowest in six years in 2016 to $522 billion, following a 22 percent fall to $595 billion in 2015, according to the Oslo-based consultancy Rystad Energy.”

This news comes as little surprise as the appetite for expensive investment projects is likely to be low amongst management teams looking to batten down the hatches to ride out a crude oil price slump largely attributed to an oversupplied market.

The oversupply is reportedly the result of a battle for market share between Saudi Arabia and the US shale oil market that has developed new extraction technologies to crank supply to levels previously not considered possible.

Other countries such as Russia continue to increase output in an effort not to cede market share in a collective effort that has sent oil prices on a race to the bottom.

The pain has been widespread for ASX-listed oil investors with shares in large-caps Woodside Petroleum Limited (ASX: WPL), Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) down 19%, 15% and 49% respectively over the course of 2015.

For investors all eyes will be on the level of dividend payouts offered by the three ASX-listed oil and gas giants as their varying levels of debt and balance sheet strength give them more or less leverage to sustain dividends through the oil price slump.

Unsurprisingly Santos has been most heavily marked down by investors due to its high debt levels and recent capital raising, while Woodside and Oil Search remain relatively in favour due to their lower debt to equity ratios and balance sheet strength.

Another theme investors could expect in 2016 is a renewal of merger and acquisition activities with Oil Search and Santos both the subject of failed takeover offers in the second half of 2015.

Another business that may be the target of a takeover offer is Cooper Basin-based junior oil producer Senex Energy Ltd (ASX: SXY), while Maverick Drilling and Exploration Ltd (ASX: MAD) has also slumped in value to levels that mean it could be taken private or picked up in small change for a multi-national giant.

The outlook for oil prices in 2016 is hard to predict, although volatility looks likely and investors in the space should look to the strongest businesses while taking a long-term view.

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Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.