|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.
SYS-CON Events announced today that AgilePoint, the leading provider of Microsoft-centric Business Process Management software, will exhibit at SYS-CON's 2nd International @ThingsExpo which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. AgilePoint is the leading provider of Microsoft-based Business Process Management (BPM) software products, has 1,300+ on-premise and cloud deployments in 25+ countries and provides the same advanced BPM feature set as J2EE vendors like IBM and Appian for the Microsoft .NET native environment. AgilePoint customer...
Oct. 31, 2014 10:45 AM EDT Reads: 161
Samsung VP Jacopo Lenzi, who headed the company's recent SmartThings acquisition under the auspices of Samsung's Open Innovaction Center (OIC), answered a few questions we had about the deal. This interview was in conjunction with our interview with SmartThings CEO Alex Hawkinson. IoT Journal: SmartThings was developed in an open, standards-agnostic platform, and will now be part of Samsung's Open Innovation Center. Can you elaborate on your commitment to keep the platform open? Jacopo Lenzi: Samsung recognizes that true, accelerated innovation cannot be driven from one source, but requires a...
Oct. 31, 2014 09:00 AM EDT Reads: 3,340
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at Internet of @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, will discuss how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money! Speaker Bio: Esmeralda Swartz, CMO of MetraTech, has spent 16 years as a marketing, product management, and busin...
Oct. 31, 2014 09:00 AM EDT Reads: 2,290
SYS-CON Events announced today that TeleStax, the main sponsor of Mobicents, will exhibit at Internet of @ThingsExpo, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. TeleStax provides Open Source Communications software and services that facilitate the shift from legacy SS7 based IN networks to IP based LTE and IMS networks hosted on private (on-premise), hybrid or public clouds. TeleStax products include Restcomm, JSLEE, SMSC Gateway, USSD Gateway, SS7 Resource Adaptors, SIP Servlets, Rich Multimedia Services, Presence Services/RCS, Diame...
Oct. 31, 2014 09:00 AM EDT Reads: 1,645
Things are being built upon cloud foundations to transform organizations. This CEO Power Panel at 15th Cloud Expo, moderated by Roger Strukhoff, Cloud Expo and @ThingsExpo conference chair, will address the big issues involving these technologies and, more important, the results they will achieve. How important are public, private, and hybrid cloud to the enterprise? How does one define Big Data? And how is the IoT tying all this together?
Oct. 31, 2014 08:45 AM EDT Reads: 1,937
We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
Oct. 31, 2014 07:00 AM EDT Reads: 1,630
The only place to be June 9-11 is Cloud Expo & @ThingsExpo 2015 East at the Javits Center in New York City. Join us there as delegates from all over the world come to listen to and engage with speakers & sponsors from the leading Cloud Computing, IoT & Big Data companies. Cloud Expo & @ThingsExpo are the leading events covering the booming market of Cloud Computing, IoT & Big Data for the enterprise. Speakers from all over the world will be hand-picked for their ability to explore the economic strategies that utility/cloud computing provides. Whether public, private, or in a hybrid form, clo...
Oct. 30, 2014 05:30 PM EDT Reads: 1,312
SYS-CON Events announces a new pavilion on the Cloud Expo floor where WebRTC converges with the Internet of Things. Pavilion will showcase WebRTC and the Internet of Things. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices--computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades.
Oct. 30, 2014 05:30 PM EDT Reads: 2,192
SYS-CON Events announced today that Gridstore™, the leader in software-defined storage (SDS) purpose-built for Windows Servers and Hyper-V, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Gridstore™ is the leader in software-defined storage purpose built for virtualization that is designed to accelerate applications in virtualized environments. Using its patented Server-Side Virtual Controller™ Technology (SVCT) to eliminate the I/O blender effect and accelerate applications Gridsto...
Oct. 30, 2014 02:00 PM EDT Reads: 2,569
SYS-CON Events announced today that Red Hat, the world's leading provider of open source solutions, will exhibit at Internet of @ThingsExpo, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Red Hat is the world's leading provider of open source software solutions, using a community-powered approach to reliable and high-performing cloud, Linux, middleware, storage and virtualization technologies. Red Hat also offers award-winning support, training, and consulting services. As the connective hub in a global network of enterprises, partners, a...
Oct. 30, 2014 12:15 PM EDT Reads: 2,070
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at Internet of @ThingsExpo, Andrew Bolwell, Director of Innovation for HP’s Printing and Personal Systems Group, will discuss how key attributes of mobile technology – touch input, senso...
Oct. 30, 2014 12:00 PM EDT Reads: 1,731
The Internet of Things (IoT) is making everything it touches smarter – smart devices, smart cars and smart cities. And lucky us, we’re just beginning to reap the benefits as we work toward a networked society. However, this technology-driven innovation is impacting more than just individuals. The IoT has an environmental impact as well, which brings us to the theme of this month’s #IoTuesday Twitter chat. The ability to remove inefficiencies through connected objects is driving change throughout every sector, including waste management. BigBelly Solar, located just outside of Boston, is trans...
Oct. 30, 2014 11:00 AM EDT Reads: 2,177
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, will examine three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics...
Oct. 30, 2014 08:00 AM EDT Reads: 1,582
Internet of @ThingsExpo Silicon Valley announced on Thursday its first 12 all-star speakers and sessions for its upcoming event, which will take place November 4-6, 2014, at the Santa Clara Convention Center in California. @ThingsExpo, the first and largest IoT event in the world, debuted at the Javits Center in New York City in June 10-12, 2014 with over 6,000 delegates attending the conference. Among the first 12 announced world class speakers, IBM will present two highly popular IoT sessions, which will take place November 4-6, 2014 at the Santa Clara Convention Center in Santa Clara, Calif...
Oct. 30, 2014 07:30 AM EDT Reads: 2,277
The Internet of Things (IoT) promises to evolve the way the world does business; however, understanding how to apply it to your company can be a mystery. Most people struggle with understanding the potential business uses or tend to get caught up in the technology, resulting in solutions that fail to meet even minimum business goals. In his session at Internet of @ThingsExpo, Jesse Shiah, CEO / President / Co-Founder of AgilePoint Inc., will show what is needed to leverage the IoT to transform your business. He will discuss opportunities and challenges ahead for the IoT from a market and tec...
Oct. 29, 2014 11:00 PM EDT Reads: 1,551
From a software development perspective IoT is about programming "things," about connecting them with each other or integrating them with existing applications. In his session at @ThingsExpo, Yakov Fain, co-founder of Farata Systems and SuranceBay, will show you how small IoT-enabled devices from multiple manufacturers can be integrated into the workflow of an enterprise application. This is a practical demo of building a framework and components in HTML/Java/Mobile technologies to serve as a platform that can integrate new devices as they become available on the market.
Oct. 29, 2014 02:15 PM EDT Reads: 2,074
SYS-CON Events announced today that O'Reilly Media has been named “Media Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. O'Reilly Media spreads the knowledge of innovators through its books, online services, magazines, and conferences. Since 1978, O'Reilly Media has been a chronicler and catalyst of cutting-edge development, homing in on the technology trends that really matter and spurring their adoption by amplifying "faint signals" from the alpha geeks who are creating the future. An...
Oct. 29, 2014 01:00 PM EDT Reads: 1,623
The Transparent Cloud-computing Consortium (abbreviation: 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 processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
Oct. 29, 2014 10:00 AM EDT Reads: 2,054
SYS-CON Events announced today that Aria Systems, the recurring revenue expert, has been named "Bronze Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Aria Systems helps leading businesses connect their customers with the products and services they love. Industry leaders like Pitney Bowes, Experian, AAA NCNU, VMware, HootSuite and many others choose Aria to power their recurring revenue business and deliver exceptional experiences to their customers.
Oct. 29, 2014 10:00 AM EDT Reads: 2,126
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce the value of the network in helping organizations to maximize their company’s cloud experience.
Oct. 29, 2014 09:00 AM EDT Reads: 2,089