|By Marketwired .||
|January 14, 2014 06:46 PM EST||
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 $5.0 billion Fayetteville shale acquisition in Arkansas from Chesapeake in November 2010.
Table 1 Top 10 U.S. Oil and Gas Upstream Deals in 2013 Price Announced Buyer Seller ($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.
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some form of XaaS – software, platform, and infrastructure as a service.
May. 22, 2015 05:00 PM EDT Reads: 2,343
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
May. 22, 2015 03:00 PM EDT Reads: 4,047
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
May. 22, 2015 02:00 PM EDT Reads: 4,656
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner is Product Manager of the Omega DevCloud with KORE Telematics Inc., will discuss the evolving requirements for developers as IoT matures and conduct a live demonstration of how quickly application development can happen when the need to comply...
May. 22, 2015 01:00 PM EDT Reads: 1,740
SYS-CON Events announced today that DragonGlass, an enterprise search platform, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. After eleven years of designing and building custom applications, OpenCrowd has launched DragonGlass, a cloud-based platform that enables the development of search-based applications. These are a new breed of applications that utilize a search index as their backbone for data retrieval. They can easily adapt to new data sets and provide access to both structured and unstruc...
May. 22, 2015 12:00 PM EDT Reads: 1,762
Converging digital disruptions is creating a major sea change - Cisco calls this the Internet of Everything (IoE). IoE is the network connection of People, Process, Data and Things, fueled by Cloud, Mobile, Social, Analytics and Security, and it represents a $19Trillion value-at-stake over the next 10 years. In her keynote at @ThingsExpo, Manjula Talreja, VP of Cisco Consulting Services, will discuss IoE and the enormous opportunities it provides to public and private firms alike. She will share what businesses must do to thrive in the IoE economy, citing examples from several industry sector...
May. 22, 2015 12:00 PM EDT Reads: 2,010
Container frameworks, such as Docker, provide a variety of benefits, including density of deployment across infrastructure, convenience for application developers to push updates with low operational hand-holding, and a fairly well-defined deployment workflow that can be orchestrated. Container frameworks also enable a DevOps approach to application development by cleanly separating concerns between operations and development teams. But running multi-container, multi-server apps with containers is very hard. You have to learn five new and different technologies and best practices (libswarm, sy...
May. 22, 2015 12:00 PM EDT Reads: 1,960
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal an...
May. 22, 2015 11:30 AM EDT Reads: 2,532
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
May. 22, 2015 11:00 AM EDT Reads: 6,222
SYS-CON Events announced today that the "First Containers & Microservices Conference" will take place June 9-11, 2015, at the Javits Center in New York City. The “Second Containers & Microservices Conference” will take place November 3-5, 2015, at Santa Clara Convention Center, Santa Clara, CA. Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities.
May. 22, 2015 10:00 AM EDT Reads: 2,045
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? In this Power Panel at DevOps Summit, moderated by Jason Bloomberg, the leading expert on architecting agility for the enterprise and president of Intellyx, panelists will peel away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud environment, and we must architect and code accordingly. At the very least, you'll have no problem fil...
May. 22, 2015 10:00 AM EDT Reads: 1,838
IoT is still a vague buzzword for many people. In his session at @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, discussed the business value of IoT that goes far beyond the general public's perception that IoT is all about wearables and home consumer services. He also discussed how IoT is perceived by investors and how venture capitalist access this space. Other topics discussed were barriers to success, what is new, what is old, and what the future may hold. Mike Kavis is Vice President & Principal Cloud Architect at Cloud Technology Pa...
May. 22, 2015 10:00 AM EDT Reads: 7,738
Disruptive macro trends in technology are impacting and dramatically changing the "art of the possible" relative to supply chain management practices through the innovative use of IoT, cloud, machine learning and Big Data to enable connected ecosystems of engagement. Enterprise informatics can now move beyond point solutions that merely monitor the past and implement integrated enterprise fabrics that enable end-to-end supply chain visibility to improve customer service delivery and optimize supplier management. Learn about enterprise architecture strategies for designing connected systems tha...
May. 22, 2015 10:00 AM EDT Reads: 5,876
There's Big Data, then there's really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at Big Data Expo®, Hannah Smalltree, Director at Treasure Data, discussed how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other machines...
May. 22, 2015 10:00 AM EDT Reads: 3,949
SYS-CON Events announced today that MetraTech, now part of Ericsson, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Ericsson is the driving force behind the Networked Society- a world leader in communications infrastructure, software and services. Some 40% of the world’s mobile traffic runs through networks Ericsson has supplied, serving more than 2.5 billion subscribers.
May. 22, 2015 09:45 AM EDT Reads: 1,354
The 4th International Internet of @ThingsExpo, co-located with the 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - announces that its Call for Papers is open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
May. 22, 2015 09:00 AM EDT Reads: 1,535
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal today!
May. 22, 2015 08:00 AM EDT Reads: 4,206
The explosion of connected devices / sensors is creating an ever-expanding set of new and valuable data. In parallel the emerging capability of Big Data technologies to store, access, analyze, and react to this data is producing changes in business models under the umbrella of the Internet of Things (IoT). In particular within the Insurance industry, IoT appears positioned to enable deep changes by altering relationships between insurers, distributors, and the insured. In his session at @ThingsExpo, Michael Sick, a Senior Manager and Big Data Architect within Ernst and Young's Financial Servi...
May. 22, 2015 06:00 AM EDT Reads: 4,730
The recent trends like cloud computing, social, mobile and Internet of Things are forcing enterprises to modernize in order to compete in the competitive globalized markets. However, enterprises are approaching newer technologies with a more silo-ed way, gaining only sub optimal benefits. The Modern Enterprise model is presented as a newer way to think of enterprise IT, which takes a more holistic approach to embracing modern technologies.
May. 22, 2015 06:00 AM EDT Reads: 5,970
Since 2008 and for the first time in history, more than half of humans live in urban areas, urging cities to become “smart.” Today, cities can leverage the wide availability of smartphones combined with new technologies such as Beacons or NFC to connect their urban furniture and environment to create citizen-first services that improve transportation, way-finding and information delivery. In her session at @ThingsExpo, Laetitia Gazel-Anthoine, CEO of Connecthings, will focus on successful use cases.
May. 22, 2015 06:00 AM EDT Reads: 4,859