US Upstream O&G Transactions Dive to Five-Year Low
U.S. mergers and acquisitions (M&A) upstream transaction value declined to $38.1 billion from $48.7 billion in 2007, according to the 2009 Global Upstream M&A Review prepared by IHS Herold Inc., an IHS company, and Harrison Lovegrove & Co., Ltd., a Standard Chartered group company. This review provides a comprehensive analysis of more than 280 significant upstream transactions that were announced in 2008.
The number of U.S. transactions was on a record pace through just past mid-year 2008 and then declined dramatically during the rest of the year. More than 90 transactions were announced through July before commodity prices and equity markets tumbled and credit tightened. In the remaining five months of 2008, only 25 deals took place. The deal count sunk to a record low in the fourth quarter, historically one of the most active quarters for U.S. upstream M&A. No U.S. corporate transactions were announced in the fourth quarter.
Corporate consolidation was very limited for the second straight year, as Stone Energy’s cash and stock takeover of Bois d'Arc Energy was the only significant corporate merger between two U.S. publicly traded companies. Asset transaction value declined more than $10 billion, or 25%, from the record high in 2007, although it still reached the second highest level in ten years. However, the US still accounted for 37% of worldwide deal value, its highest percentage since 2004.
Weighted average proved reserves implied deal value soared to $19.11/boe in the second quarter and then retracted significantly in the second half along with oil and gas prices. The average deal pricing for 2008 was a record $16.56/boe due to the strong first half performance.
Shale gas transactions accounted for over 35% of US deal value in 2008. Gas represented more than 70% of acquired proven reserves for the third consecutive year. The average reserve life of acquired properties (approximately 15 years) was the longest in our five year study period.
Chesapeake Energy sold more than $12 billion of US onshore assets during 2008 (including forward sale Volumetric Production Payment transactions) highlighted by divestments of interests in producing properties and leasehold to form joint ventures with StatoilHydro (Marcellus Shale), Plains Exploration & Production (Haynesville Shale) and BP plc (Fayetteville and Woodford Shales). XTO Energy spent over $8 billion on nine U.S. transactions, including the $4.2 billion corporate acquisition of privately-held Hunt Petroleum.
IHS Herold Inc. is a specialized research and consulting firm focusing on valuation, strategy, and performance measurement of the world’s leading oil and gas companies.
Operates 27 Offshore Rigs
- BP Chairman Svanberg to Retire; Search Starts for Successor (Oct 19)
- BP Midstream Partners Seeks To Raise Up To $893MM In IPO (Oct 16)
- BP, Azerbaijan's SOCAR To Sign Caspian Sea Exploration Deal In 2017 (Oct 12)
Company: Bois d'Arc more info
- US Upstream O&G Transactions Dive to Five-Year Low (Mar 17)
- Bois d'Arc, Stone Energy's Stockholders Check Yes for Merger (Aug 27)
- Stone Energy to Acquire Bois d'Arc Energy (Apr 30)
Company: XTO Energy more info
- One Killed, 3 Hurt in North Dakota Well Explosion -AP (Jun 20)
- Exxon Said to Be on the Hunt for West Texas Shale Bargains (Sep 18)
- ExxonMobil Selling Cook Inlet Assets, Remains Committed to Alaska (Jul 07)
Company: Chesapeake Energy Corporation more info
- Chesapeake To Cut Rig Count, Bring Fewer Wells To Production (Aug 03)
- Chesapeake CEO: Downturn Challenges Helped Oil, Gas Companies (Mar 07)
- Chesapeake Energy Posts Smaller Quarterly Loss (Feb 23)
Company: Plains Exploration & Production more info
- Noble, PXP Shake Hands on UDW Drillships for Gulf of Mexico (Apr 18)
- BP Sells Non-Strategic GOM Assets for $5.5B (Sep 10)
- PXP Posts Early Tender Offer Results for Senior Notes (Dec 01)
Company: StatoilHydro more info
Operates 29 Offshore Rigs
- Samsung Heavy Industries Lands Statoil FSU Construction Contract (Sep 14)
- First Movers in Eco-Drilling: Going 'Dope'-less (Apr 25)
- StatoilHydro Delays Hammerfest LNG Start Up (Nov 23)