Global Upstream Oil and Gas M&A Activity Rebounded in 2Q

The global mergers and acquisitions (M&A) upstream deal count nearly doubled in the second quarter 2009 from a ten-year low in the first quarter 2009, spurred by a resurgence in oil prices and a thaw in equity and credit markets, according to research prepared by IHS Herold Inc., an IHS company. IHS Herold is a specialized research and consulting firm focusing on valuation, strategy, and performance measurement of the world's leading oil and gas companies.

"Both U.S. onshore and international deal counts increased significantly, although North American activity remained well below historical averages," said Chris Sheehan, IHS Herold director of M&A research. "International pricing for proved plus probable reserves held firm on stronger crude oil prices, but falling gas prices plunged North American asset deal prices to the lowest level since 2005."

Sheehan continued, "The upsurge in activity in the second quarter is encouraging, but the market is still extremely volatile." He added that IHS Herold will provide detailed insights into the outlook for upstream M&A at its upcoming 18th Pacesetters Energy Conference, which will be held at the Hyatt Regency Hotel in Old Greenwich, Conn., on September 22-24, 2009. This premier industry event will feature three keynote speakers and 15 panels that focus on such critical industry issues, with a special emphasis on insights and trends in mergers & acquisitions and capital investment.

Herold reported that second quarter 2009 total transaction value increased four-fold outside North America, driven by strong activity in the Africa/Middle East region and upturns in Europe and Asia-Pacific. Total worldwide transaction value was flat at $28.4 billion, as first quarter 2009 figures were buttressed by the $20 billion Suncor/Petro-Canada merger. National oil companies represented nearly 40% of global deal value, including Sinopec's $8.8 billion agreement to acquire Addax Petroleum, the largest overseas upstream transaction by a Chinese company.