Shale deals drive US M&A activity -- up 135% in third quarter

The total value of US oil and gas mergers and acquisitions during the third quarter of 2011 jumped 135% as foreign investors continued to show interest in the energy sector, especially in taking positions in shale plays and upstream-related assets, according to PwC US.

In the 3Q2011 there were 46 deals with values greater than $50 million, accounting for $48.8 billion in deal value, a significant rise from the $20.8 billion during the same period in 2010. Third quarter average deal size increased to $131 million from $117 million in the same period in 2010, driven by 23 large deals with deal values over $250 million.

There were 15 corporate transactions with values greater than $50 million, generating 89%, or $43.4 billion, of total third quarter deal value – a 411% increase over the same period last year. Thirty-two asset deals with values greater than $50 million contributed $14.7 billion, compared to the same number of asset deals with a combined value of $12.4 billion seen during the third quarter of 2010.

“Despite a number of headwinds in the third quarter with volatile global equity markets and commodity prices, deals in the energy sector continued as companies sought to take advantage of opportunities in shale to gain technology know-how and diversify service offerings,” said Rick Roberge, principal in PwC’s energy M&A practice. “Large multinational corporations are able to withstand market volatility, and we’re continuing to see them push through and get deals done – with their focus primarily in the upstream sector and shale-related plays. We are also continuing to see private equity look to energy deals as the space evolves. With financial sponsors making inroads and corporates very focused on oil and maximizing the value of current assets, we expect energy to remain one of the hottest sectors for deals.”

For deals valued over $50 million, upstream deals made up 52% of activity in the third quarter of 2011 with 24 transactions accounting for $28.1 billion, or 57 percent of total third quarter deal value. Oilfield equipment followed in deal activity with 12 transactions totaling $7.3 billion, while midstream deals contributed $10.4 billion with four deals. There were six downstream deals with a total value of $3.1 billion.

According to PwC, there were 13 deals with value greater than $50 million related to shale plays in the third quarter of 2011, totaling $22.6 billion, or 46 percent of total deal value. Included in those shale deals were four transactions involving the Marcellus Shale totaling $3.6 billion and four Utica Shale deals with a total value of $3.1 billion.

“Shale-gas assets continue to attract vast interest from oil and gas companies with five of the top 10 largest deals in the third quarter involving shale plays,” said Steve Haffner, a Pittsburgh-based partner with PwC’s energy practice. “In the Marcellus Shale, we’re seeing steady activity among the corporates despite the continued weakness of natural gas prices, including new players entering and existing companies expanding acreage.

Related Articles

Glori Energy, Infinity complete merger and private placement

04/15/2014 Glori Energy Inc. and Infinity Cross Border Acquisition Corp. have completed the merger and share exchange agreement first announced on Jan. 8, and a simultaneous private placement led by Infinity ...

Regency closes merger with PVR Partners

03/24/2014

Regency Energy Partners LP and PVR Partners LP have closed Regency’s acquisition of PVR.

Glori completes acquisition of East Texas oil property

03/18/2014

Infinity Cross Border Acquisition Corp. and Glori Energy Inc. have completed Glori’s acquisition of producing oil assets in Wood County, Texas, from Petro-Hunt LLC for $40 million.

Drilling Tools International acquires Reamco

03/17/2014

Houston, TX-based Directional Rentals Inc., a portfolio company of private equity firm Hicks Equity Partners (HEP), has acquired oilfield services company Reamco Inc.

Glori Energy merges with Infinity, acquires East Texas oil property

02/07/2014 Infinity Cross Border Acquisition Corp. and Glori Energy Inc. are merging, and Glori has signed an agreement to acquire producing oil assets in Coke field and other operated production in Wood Coun...

More Oil & Gas Financial Articles

Glori Energy, Infinity complete merger and private placement

Tue, Apr 15, 2014

Glori Energy Inc. and Infinity Cross Border Acquisition Corp. have completed the merger and share exchange agreement first announced on Jan. 8, and a simultaneous private placement led by Infinity Group and Hicks Equity Partners LLC.

Regency closes merger with PVR Partners

Mon, Mar 24, 2014

Regency Energy Partners LP and PVR Partners LP have closed Regency’s acquisition of PVR.

Glori completes acquisition of East Texas oil property

Tue, Mar 18, 2014

Infinity Cross Border Acquisition Corp. and Glori Energy Inc. have completed Glori’s acquisition of producing oil assets in Wood County, Texas, from Petro-Hunt LLC for $40 million.

Drilling Tools International acquires Reamco

Mon, Mar 17, 2014

Houston, TX-based Directional Rentals Inc., a portfolio company of private equity firm Hicks Equity Partners (HEP), has acquired oilfield services company Reamco Inc.

Glori Energy merges with Infinity, acquires East Texas oil property

Fri, Feb 7, 2014

Infinity Cross Border Acquisition Corp. and Glori Energy Inc. are merging, and Glori has signed an agreement to acquire producing oil assets in Coke field and other operated production in Wood County, Texas, from Petro-Hunt LLC for $40 million.

 

Most Popular

Oil & Gas Jobs

Search More Job Listings >>
Subscribe to OGFJ