Apache Authors: Pat Romanski, John Mertic, Liz McMillan, Elizabeth White, Janakiram MSV

News Feed Item

U.S. Oil and Gas Upstream Deal Counts Down 17% in 2013, Says PLS Inc.

U.S. Deal Value of $51.8 Billion in 519 Transactions

HOUSTON, TX -- (Marketwired) -- 01/14/14 --

  • Largest deal of the year (in U.S. and globally) is Devon's $6.0 billion Eagle Ford acquisition.
  • Foreign U.S. investments drop to $6.0 billion vs. $11.3 billion in 2012 & $44.8 billion in 2011.
  • Most impactful U.S. deal of the year: Linn Energy's $4.9 billion buy of Berry Petroleum.
  • U.S. land grab in known unconventional resource plays substantially over.
  • Top U.S. Areas: Eagle Ford, Permian unconventional, Rockies conventional, shallow Gulf of Mexico, Bakken.
  • 2013 $51.8 billion deal value down 42% from 2012, unconventional deal share is 54% vs. 45%.
  • Roughly eight months of inventory in Deals in Play in the U.S., compared to 11 months globally.

PLS Inc., a leading research, transaction and advisory firm to the global E&P and financial industries, in conjunction with its international partner Derrick Petroleum Services, reported that U.S. upstream oil and gas M&A activity in 2013 totaled $51.8 billion in 519 transactions (including 322 with deal value disclosed). The largest deal -- in the U.S. as well as the world -- is Devon Energy's $6.0 billion cash buy of a prime Eagle Ford position in Texas (including 53,000 boepd and 82,000 net acres) from privately held GeoSouthern Energy. This deal also represents the single largest pure-play unconventional asset buy, surpassing BHP Billiton's $5.0 billion Fayetteville shale acquisition in Arkansas from Chesapeake in November 2010.

                                  Table 1
               Top 10 U.S. Oil and Gas Upstream Deals in 2013

 Announced        Buyer               Seller         ($MM)   Asset Location
---------- ------------------ --------------------- ------- ----------------
11/20/2013    Devon Energy      GeoSouthern Energy   $6,000    Eagle Ford
02/21/2013     Linn Energy       Berry Petroleum     $4,900     Multiple
07/18/2013  Fieldwood Energy          Apache         $3,750     GOM Shelf
01/30/2013      Sinochem             Pioneer         $1,700      Permian
09/04/2013   Oasis Petroleum  Roda Drilling; Zeneco  $1,450      Bakken
06/20/2013   Bennu Oil & Gas      ATP Oil & Gas      $1,269     GOM Deep
01/15/2013  Denbury Resources     ConocoPhillips     $1,050      Rockies
02/25/2013       Sinopec            Chesapeake       $1,020 Mississippi Lime
10/03/2013 Templar; Le Norman       Forest Oil       $1,000   Panhandle TX
12/09/2013    QEP Resources          EnerVest         $950       Permian
---------- ------------------ --------------------- ------- ----------------
                                      Total         $23,089

PLS calculates that 2013's total of $51.8 billion U.S. deal value is down 42% from 2012's record $89.6 billion. However, that 2012 total was skewed by Freeport McMoRan Copper & Gold's $17.6 billion buy of Plains E&P. Excluding, the Plains sale, 2013 deal value would be down 28%, closer to the 17% drop in deal count during the same period (from 624 deals in 2012 to 519 in 2013).

During 2013, the Eagle Ford shale ($8.8 billion) took top honors for deal value followed by the unconventional Permian ($7.5 billion), Rockies conventional ($5.5 billion), shallow Gulf of Mexico ($4.2 billion) and Bakken ($2.9 billion). This compares to 2012 rankings led by the unconventional Permian ($7.7 billion) deepwater Gulf ($7.2 billion), Bakken ($7.0 billion), shallow Gulf of Mexico ($6.3 billion) and conventional Permian ($5.6 billion).

An analysis of M&A activity reveals the U.S. oil and gas industry is in the early stages of transforming from buying land in unconventional plays to drilling and development of these positions. The land rush began in earnest in 2007, kicked into high gear in December 2009 with ExxonMobil's $41.0 billion buy of XTO Energy, and seemed to peak in 2011 with BHP Billiton's $15.1 billion acquisition of Petrohawk.

"As the land grab winds down, companies are now focused on drilling thereby raising additional capital demands," said Brian Lidsky, Managing Director of PLS Inc. "As the drilling capital needs intensify, companies will adjust their inventories to keep finances in order. Subsequent drilling results and the drive for cost efficiencies will also divide winners and losers and could drive market consolidation between the public companies while providing exit opportunities for private independents like Geosouthern. Overall, PLS sees the most deal opportunities in the Eagle Ford, Permian, Bakken and Marcellus core, while mature shale plays like the Barnett offer maintenance opportunity for MLPs like EnerVest."

PLS also notes that core areas are emerging in each of the shale plays for optimal development based on the rocks, infrastructure and completion techniques. In 2013, these core areas continued to be more tightly defined and some companies like Shell and BHP that bought in the periphery or bet on rising natural gas prices have had to take write-downs. As with the Devon/GeoSouthern Eagle Ford transaction, PLS expects the price of entry into the core-of-the-core areas to continue to rise. Scale and efficiencies (pad drilling, completions) ultimately will drive costs lower and set up more consolidation, with top operators earning the upper hand.

Foreign Investment down 86% since 2011 --
Part of the U.S. M&A decline in 2013 is due to less cash being spent by foreign interests. Since 2007, foreign buying of $113 billion accounted for 25% of the U.S. market with 72% of that money going toward the unconventional resources. The peak year was 2011 with $44.8 billion or 53% of the market, of which $34.5 billion was for unconventional. 2011 saw Australia's BHP Billiton buying Petrohawk (Eagle Ford, Haynesville) for $15.1 billion and Norway's Statoil buying Brigham Exploration (Bakken) for $4.7 billion.

                                   Table 2
                  United States Oil and Gas Upstream Deals
                   Conventional versus Unconventional (1)
         Conventional     Unconventional        Total      % Unconventional
 Year   Value    Count    Value    Count    Value   Count   Value    Count
 2013   $23.9     256     $27.8     263     $51.8    519     54%      51%
 2012   $48.9     290     $40.7     334     $89.6    624     45%      54%
 2011   $21.5     357     $62.4     372     $83.9    729     74%      51%
 2010   $30.8     280     $44.7     244     $75.5    524     59%      47%
 2009   $14.0     224     $47.8      87     $61.8    311     77%      28%
 2008   $25.0     275     $22.9     108     $47.9    383     48%      28%
 2007   $45.5     279      $4.2      56     $49.7    335      8%      17%
 Total  $209.7   1,961    $250.5   1,464   $460.2   3,425    54%      43%

Note: (1) Deal Value in US$ billions. Deal Counts include those with values not disclosed.

Since the 2011 peak of $44.8 billion, foreign spending in the U.S. has dropped off dramatically, declining 75% in 2012 to $11.3 billion ($8.8 billion for unconventional resources) and another sequential 47% in 2013 to $6.1 billion ($4.4 billion for unconventional). Since 2007, the only other year that saw less foreign investment was 2009 ($5.4 billion), but that same year ExxonMobil paid $41 billion for XTO Energy, bringing global attention to U.S. unconventional opportunities. While foreign companies remain interested in U.S. assets, it is not likely we will see the rush to invest as quickly in U.S. plays as we did in 2010 and 2011. For those global interests not yet in the U.S., partnering with top operators will continue to be a large part of the equation but we expect foreign investors to be more selective in the future.

MLPs & private equity replacing foreign investors as a go-to source for capital --
Despite the decrease in foreign spending, there remain strong buying sectors including the U.S. upstream MLPs and private equity. On the MLP front, 2013 saw two remarkable transactions. The first is Linn Energy's $4.9 billion acquisition of Berry Petroleum, which closed on December 16 after ten months of reviews. This transaction is a milestone for the M&A markets, marking the first-ever acquisition of a public C-Corp by an upstream LLC, and opens the door for self-described "acquisition machine" Linn and other MLPs to structure transactions for corporate acquisitions, as opposed to asset-based deals. The second notable MLP transaction bucks the MLP buying and dropdown theme and saw Pioneer Natural Resources buy back the 48% stake of its related MLP Pioneer Southwest Energy Partners that it did not own for $606 million. This deal will help Pioneer boost scale and operating efficiencies in the Permian Basin.

Private equity buying and selling remains strong and their coffers are well-stocked. For example, last year's Devon/GeoSouthern deal rewarded private equity firm Blackstone with $1.54 billion. Also in 2013, energy-focused PE firm Riverstone Holdings made its largest commitment to date by backing Fieldwood Energy's $3.75 billion buy of Apache's Gulf of Mexico shelf assets (and already this year its $1.12 billion GOM buy from SandRidge). The Apache sale marks the last exit of any significant presence by a major or large independent from the GOM shallow waters. By and large these companies are re-deploying capital to the U.S. onshore resource plays or deepwater Gulf of Mexico.

$38 billion of Deals in Play --
In addition to tracking completed deals, PLS and Derrick through their Global M&A Database and PLS through its multiple listing service provide the industry's only commercially available comprehensive list of oil and gas buying opportunities in the world, together known as "Deals in Play." On a quarterly basis using PLS and Derrick's proprietary valuation analytics, the firms report a total dollar value of deals available in the upstream oil and gas marketplace. When compared to actual transaction volumes, this leading indicator allows industry participants to gauge relative market strength across various oil and gas regions and plays.

As of January 1, 2014, the rapid growth of the U.S. "Deals in Play" inventory has stabilized and now totals $38 billion, up from $33 billion a quarter ago and $27 billion a year ago. This total represents roughly eight months of M&A activity, compared to $127 billion of "Deals in Play" or 11 months of inventory globally.

For 2014, PLS expects the U.S. deal markets to continue to be driven by: 1) Traditional sale of non-core assets by oil and gas firms; 2) High-quality, later-stage JV opportunities still sourcing capital for drilling; 3) Ample private equity sources energized by recent successes like GeoSouthern and Hilcorp; and 4) MLPs' need to feed their dividend-driven business models.

Later this month, PLS will release its more detailed annual oil and gas M&A study analyzing additional data including regional activity plus valuation trends. Prior studies are available at www.plsx.com/ma. For sales or more information regarding the Global M&A Database, please call PLS Inc. at (713) 650-1212, email [email protected] or visit www.plsx.com/ma.

About The Global M&A Database: PLS Inc. and Derrick Petroleum Services provide global clients with leading information and research services. Since 2007, the Global M&A Database has tallied more than 7,000 upstream oil and gas transactions including over 4,400 with values disclosed, totaling over $1.2 trillion. This unique database is maintained 24/7 by a team of analysts and are accessible via the web at www.plsx.com/ma.

Source: PLS Inc., Copyright © 2014 by PLS Inc.

Add to Digg Bookmark with del.icio.us Add to Newsvine

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain. In this power panel at @...
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
SYS-CON Events announced today that Hitrons Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Hitrons Solutions Inc. is distributor in the North American market for unique products and services of small and medium-size businesses, including cloud services and solutions, SEO marketing platforms, and mobile applications.
Successful digital transformation requires new organizational competencies and capabilities. Research tells us that the biggest impediment to successful transformation is human; consequently, the biggest enabler is a properly skilled and empowered workforce. In the digital age, new individual and collective competencies are required. In his session at 19th Cloud Expo, Bob Newhouse, CEO and founder of Agilitiv, will draw together recent research and lessons learned from emerging and established ...
November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Penta Security is a leading vendor for data security solutions, including its encryption solution, D’Amo. By using FPE technology, D’Amo allows for the implementation of encryption technology to sensitive data fields without modification to schema in the database environment. With businesses having their data become increasingly more complicated in their mission-critical applications (such as ERP, CRM, HRM), continued ...
SYS-CON Events announced today that Enzu will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to focus on the core of their online busine...
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Established in 1998, Calsoft is a leading software product engineering Services Company specializing in Storage, Networking, Virtualization and Cloud business verticals. Calsoft provides End-to-End Product Development, Quality Assurance Sustenance, Solution Engineering and Professional Services expertise to assist customers in achieving their product development and business goals. The company's deep domain knowledge of Storage, Virtualization, Networking and Cloud verticals helps in delivering ...
SYS-CON Events announced today that Cloudbric, a leading website security provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Cloudbric is an elite full service website protection solution specifically designed for IT novices, entrepreneurs, and small and medium businesses. First launched in 2015, Cloudbric is based on the enterprise level Web Application Firewall by Penta Security Sys...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
In the next five to ten years, millions, if not billions of things will become smarter. This smartness goes beyond connected things in our homes like the fridge, thermostat and fancy lighting, and into heavily regulated industries including aerospace, pharmaceutical/medical devices and energy. “Smartness” will embed itself within individual products that are part of our daily lives. We will engage with smart products - learning from them, informing them, and communicating with them. Smart produc...
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
SYS-CON Events announced today that Coalfire will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Coalfire is the trusted leader in cybersecurity risk management and compliance services. Coalfire integrates advisory and technical assessments and recommendations to the corporate directors, executives, boards, and IT organizations for global brands and organizations in the technology, cloud, health...
SYS-CON Events announced today that Transparent Cloud Computing (T-Cloud) Consortium will exhibit at the 19th International Cloud Expo®, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The Transparent Cloud Computing Consortium (T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data proces...
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
The Internet of Things (IoT), in all its myriad manifestations, has great potential. Much of that potential comes from the evolving data management and analytic (DMA) technologies and processes that allow us to gain insight from all of the IoT data that can be generated and gathered. This potential may never be met as those data sets are tied to specific industry verticals and single markets, with no clear way to use IoT data and sensor analytics to fulfill the hype being given the IoT today.
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...