Untitled Document
Untitled Document

UK, Canadian assets command month's largest sums

Sinopec added to China's Canadian asset grab in the largest deal of the 30-day period from mid-September to mid-October with its $2.9 billion (including debt) takeover of Daylight Energy Inc. Sinopec achieved a recommendation from the board of Daylight by offering C$10.08 per share, a substantial premium over the $4.59 trading price of Daylight Energy one day prior to the offer. In addition to a company 67% weighted towards gas with a majority of reserves already developed, Alberta-based Daylight offers additional upside with its land holdings in both the Montney and emerging Duvernay shale plays. In his weekly analysts of M&A deals for OGFJ, Evaluate Energy analyst Eoin Coyne points out the acquisition metrics after the upside and tax pools have been considered equates to under $18 per proved boe.

In the first of a handful of deals involving UK assets, Apache agreed to acquire a mature portfolio of UK North Sea assets from ExxonMobil for $1.75 billion. The deal, announced September 21, is the largest in the region since the UK government increased the supplementary tax rate to 32% in the March 2011 budget, which increased the tax burden for some fields to 82%, noted Coyne. "The portfolio of assets acquired from ExxonMobil is weighted 70% towards oil and the cash consideration equates to an unadjusted cost per proved barrel of $26. Factoring in the valuation of the midstream and exploration assets that are part of the deal however decreases the cost per barrel to a more respectable $19," Coyne continued. Apache gained entry into the region in 2003 via the Forties field and hopes to use experience from the field to extend the current 6.5-year reserve life of the recently purchased assets.

The second largest UK asset transaction of the period saw Italy's ENI commit $844 million to acquire GDF SUEZ's 10.4% interest in the Elgin-Franklin gas condenstate fields in the UK North Sea. The acquisition adds to Eni's current 21.8% interest in the fields.

In yet another UK North Sea asset transaction, Premier Oil made an offer for fellow North Sea exploration company Encore Oil for $325 million (net of cash held by Encore).

In the US, NFR Energy was the buyer in one of the period's largest deals. On September 27 the company announced its acquisition of natural gas assets in East Texas from SandRidge Energy for $231 million. The sold properties include approximately 25,000 net acres with average 2011 production of approximately 25 MMcfed. Transaction metrics calculated by NFR Energy sit at $7,092 per flowing Mcfe/d (LTM), and $1.38/Mcfe of PDP reserves, $0.46 Mcfe of total proved. According to an NFR conference presentation October 11, the assets, mainly in Harrison and Rusk counties, offer a strong liquids component and are considered to be an excellent bolt-on acquisition to the company's current East Texas position.

Click to Enlarge

 Click to Enlarge

More Oil & Gas Financial Journal Current Issue Articles
More Oil & Gas Financial Journal Archives Issue Articles
View Oil and Gas Articles on PennEnergy.com

Related Articles

Apache completes sale of Lucius and Heidelberg GOM developments

07/01/2014 Apache Corp. has completed the previously disclosed sale of non-operated interests in the Lucius and Heidelberg development projects in the Gulf of Mexico and 11 primary term deepwater exploration ...

US M&A shifts toward larger deals with Encana's Eagle Ford entry leading the pack

06/09/2014 PLS reports that the period from April 17 through May 16, 2014 saw larger deals (exceeding $100 million) in the US upstream sector, resulting in an average deal size of $437 million vs. $231 millio...

Carnarvon awarded permit to explore in Barrow sub-basin

05/30/2014

Carnarvon Petroleum Ltd. has been awarded Petroleum Exploration Permit EP-491 (bid block L11-7) on the eastern flank of the prolific oil-producing Barrow sub-basin offshore Western Australia.

Cowan and Company analysts: North American budgets heading higher

05/22/2014 Analysts with Cowan and Company have checked with 53 of the larger spenders of E&P dollars in the US and found that a total of $1.4 billion has been added to E&P budgets since the publishin...

Apache makes leadership changes

05/21/2014

Apache Corp. reports that Tom Yelich and Tim Custer will assume new leadership posts in a reorganization of the company's Business Development and Land groups.

More Oil & Gas Financial Articles

Apache completes sale of Lucius and Heidelberg GOM developments

Tue, Jul 1, 2014

Apache Corp. has completed the previously disclosed sale of non-operated interests in the Lucius and Heidelberg development projects in the Gulf of Mexico and 11 primary term deepwater exploration blocks to a subsidiary of Freeport-McMoRan Copper & Gold Inc. and other interest owners for $1.4 billion.

US M&A shifts toward larger deals with Encana's Eagle Ford entry leading the pack

Mon, Jun 9, 2014

PLS reports that the period from April 17 through May 16, 2014 saw larger deals (exceeding $100 million) in the US upstream sector, resulting in an average deal size of $437 million vs. $231 million during Q114.

Carnarvon awarded permit to explore in Barrow sub-basin

Fri, May 30, 2014

Carnarvon Petroleum Ltd. has been awarded Petroleum Exploration Permit EP-491 (bid block L11-7) on the eastern flank of the prolific oil-producing Barrow sub-basin offshore Western Australia.

Cowan and Company analysts: North American budgets heading higher

Thu, May 22, 2014

Analysts with Cowan and Company have checked with 53 of the larger spenders of E&P dollars in the US and found that a total of $1.4 billion has been added to E&P budgets since the publishing of Cowan and Company’s year-end E&P spending survey in January.

Apache makes leadership changes

Wed, May 21, 2014

Apache Corp. reports that Tom Yelich and Tim Custer will assume new leadership posts in a reorganization of the company's Business Development and Land groups.

Most Popular

Oil & Gas Jobs

Search More Job Listings >>
Subscribe to OGFJ