Moody’s Investors Service says that it expects the dramatic surge in shareholder activism in the North American energy sector, led by activist hedge funds, to continue into 2014.

The rating agency notes that activist shareholders started becoming a more significant force in the sector last year, shaking up boards of directors, spurring asset sales, and forcing leadership changes at a number of companies. And, it says that the total number of activist shareholder campaigns in the United States and Canada looks likely to exceed 2012’s record levels, “due to record levels of cash on corporate balance sheets, a ready supply of inexpensive debt and activists’ own success in attracting investment capital.”

Indeed, certain characteristics of the energy industry attract activists’ attention, notes Christian Plath, Moody’s vice president and senior analyst. “These include tangible assets that can be sold or spun off to unlock value, the North American shale oil and natural gas boom and the industry’s entrepreneurial culture, which can lead to weaker checks and balances on corporate leadership and less discipline around executive compensation practices,” Moody’s says, adding that there have already been several contentious shareholder meetings that spotlighted activist pressure this year.

“We don’t expect shareholder activism to quiet down anytime soon,” Plath says. “Given the favorable climate for activism and the energy industry’s unique characteristics, the sector is likely to remain fertile ground for activists through this year and into next.”

While this sort of investor activism is generally positive for shareholders, it’s often a mixed blessing for credit investors, Plath also notes. “Activists have forced beneficial changes, such as improved corporate governance practices and greater financial and capital discipline,” Plath says. “But activism has also increased the risk of shareholder-focused strategic and financial policy changes, new or expanded share repurchases and divestitures of cash-generating assets that could harm creditors’ interests.”