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  • MERGERS & ACQUISITIONS

    SECTIONS: DEAL MONITOR | CORPORATE MERGERS | JVS

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    Weekly Update: BP continues asset reshuffle with North Sea sale

    View a PDF of this week's transaction details

    Eoin Coyne
    Evaluate Energy

    BP was involved in the largest E&P deal of the week with a $400 million sale of its Southern Gas assets in the UK North Sea to Perenco. The assets represent more than 10% of BP’s current North Sea production but are being sold as part of BP’s aim to raise $38 billion in asset sales from 2010 to 2013. The sale brings BP’s proceeds so far to $23 billion. Although the deal represented BP’s second significant sale of mature North Sea assets in the past 12 months, the company quickly reiterated its commitment to the region by pledging $10 billion of investment over the next five years.

    The assets in question were originally put up for sale in February 2011, but buyers were possibly put off by the UK budget that followed shortly after, which raised petroleum taxes in a surprise move to reap an additional £2 billion for the treasury. Twelve months later and following several suspended projects on the back of the tax increase, the government introduced measures to underwrite up to 75% of decommissioning costs, making the North Sea a more viable acquisition target again.

    On the same day as the North Sea asset divestment, it was revealed that BP acquired 84,000 acres in Ohio, prospective for the emerging Utica shale play. The consideration was undisclosed but is thought to be around $330 million, representing a cost per acre of just under $4,000. This represents a high price for a largely unproven play but early indications from Chesapeake’s exploration program indicate that the liquids-rich play could surpass that of the Eagle Ford in which the liquids-rich sweet spots demand in excess of $20,000 per acre.

    Continental Resources agreed to a deal to acquire the assets of Wheatland Oil Inc. for $340 million. Wheatland Oil’s principal assets are a 5% interest in a large portion of Continental Resources’ Bakken acreage. The assets include 37,900 acres of developed and undeveloped acreage, 17 million boe of proved reserves and production of 2,500 boe/d.

    There were two results from national licensing rounds this week with India announcing the results of its ninth NELP round and Uruguay announcing the result of their second round focusing on offshore exploration blocks. India’s ninth round included a diverse mix of assets including deep and shallow water blocks off the East and West coasts and onshore assets in four states. Although the government previously intimated that the round would be open to foreign companies, the results were dominated by domestic state-run firms who received over half of the operatorships. Only one company based outside of India was successful in gaining an operatorship, with US-based Deep Industries winning operator status for three blocks.

    In Uruguay, the results of the second national licensing round were reported, three years following its first offering of exploration blocks to energy companies. As the blocks are located in deep water areas, which require technical knowledge and deep pockets, the list of qualified bidders were made up of major and mid-cap companies. The final block awards went to BP and BG, who each won three blocks, and Total and Tullow Oil, who took one block each.

    Table of Articles and Reports:

    Article with Highlights Transaction Details
    Pengrowth Makes $1.9B move for NAL, March 23, 2012
    Evaluate Energy Weekly: March 23, 2012
    INPEX to partner with Shell on world’s first floating LNG project, March 16, 2012
    Evaluate Energy Weekly: March 16, 2012
    Linn Energy makes largest move in quiet week in E&P market, March 9, 2012
    Evalutate Energy Weekly: March 9, 2012
    Linn Energy deal strengthens US portfolio at the expense of its escalating debt level, March 2, 2012
    Evaluate Energy Weekly: March 2, 2012
    EP Energy and Cove Energy find their suitors, February 24, 2012
    Evaluate Energy Weekly: February 24, 2012
    Mitsubishi enters major Montney JV in Canada with Encana, February 17, 2012
    Evaluate Energy Weekly: February 17, 2012
    Sinochem increases China’s ties with South America, February 10, 2012
    Evaluate Energy Weekly: February 10, 2012
    SandRidge makes swoop for Dynamic Offshore Resources, February 3, 2012
    Evaluate Energy Weekly: February 3, 2012
    Apache, Crescent Point Energy play it safe with bolt-on acquisitions, January 27, 2012
    Evaluate Energy Weekly: January 27, 2012
    Pembina, Provident merge in $3.6B deal, January 20, 2012
    Evaluate Energy Weekly: January 20, 2012
    Chevron, Statoil, Repsol enter partnership in Canadian Atlantic, January 13, 2012
    Evaluate Energy Weekly: January 13, 2012
    New Year sees US shale acquisitions continue as Total, Sinopec make moves, January 6, 2011
    Evaluate Energy Weekly: January 6, 2012
    BP gains licenses in first GOM lease sale since Horizon disaster, December 16, 2011
    Evaluate Energy Weekly: December 16, 2011
    Shell, ENI gamble on Nigeria; Total plays it safe in North Sea, December 9, 2011 Evaluate Energy Weekly: December 9, 2011
    Asia intensifies North American asset grab, December 2, 2011 Evaluate Energy Weekly: December 2, 2011
    KKR furthers nat gas bet with Samson acquisition, November 25, 2011 Evaluate Energy Weekly: November 25, 2011
    Majors continue to look further for new opportunities, November 18, 2011
    Evaluate Energy Weekly: November 18, 2011
    ExxonMobil makes entry into Kurdistan, November 11, 2011
    Evaluate Energy Weekly: November 11, 2011
    Chesapeake deal confirms Utica's status as hottest US play, November 4, 2011
    Evaluate Energy Weekly: November 4, 2011
    Shareholders display apathy to Shell-Valero rumor, Oct 28, 2011
    Evaluate Energy Weekly: October 28, 2011
    Oil and Gas M&A still rife despite jittery markets, Oct 21, 2011 Evaluate Energy Weekly: October 21, 2011
    China ups Canadian portfolio with Daylight Energy buy, October 14, 2011 Evaluate Energy Weekly: October 14, 2011
    Premier makes opportunistic grab for Encore Oil, October 7, 2011 Evaluate Energy Weekly: October 7, 2011
    India delves further into US shale sector, Sept 30, 2011 Evaluate Energy Weekly: Sept 30, 2011
    Apache makes surprise move for Exxon North Sea assets, Sept 23, 2011 Evaluate Energy Weekly: Sept 23, 2011
    Gazprom and ENI reaffirm deal in Libya, Sept 16, 2011 Evaluate Energy Weekly: Sept 16, 2011
    Hayward's Vallares announces Kurdistan merger, Sept 9, 2011 Evaluate Energy Weekly: Sept 9, 2011
    ExxonMobil replaces BP in arctic JV with Rosneft, Sept 2, 2011
    Evaluate Energy Weekly: Sept 2, 2011
    Arrow adds new string to its CBM bow, August 26, 2011
    Evaluate Energy Weekly: August 26, 2011
    Noble ventures into Marcellus via CONSOL, August 19, 2011
    Evaluate Energy Weekly: August 19, 2011
    China and GDF SUEZ enter key partnership, August 12, 2011 Evaluate Energy Weekly: August 12, 2011
    SandRidge Energy grabs Korea opportunity, August 5, 2011
    Evaluate Energy Weekly: August 5, 2011
    Afren makes brave move into Kurdistan, July 29, 2011 Evaluate Energy Weekly: July 29, 2011
    CNOOC continues Asia's incursion into Canada with OPTI acquisition, July 22, 2011 Evaluate Energy Weekly: July 22, 2011
    BHP swoops on PetroHawk Energy, July 15, 2011 Evaluate Energy Weekly: July 15, 2011
    ETE regains position in race to acquire SUG, July 8, 2011 Evaluate Energy Weekly: July 8, 2011
    Mitsui spends big to enter Eagle Ford, July 1, 2011 Evaluate Energy Weekly: July 1, 2011
    Williams bid sparks takeover war, June 24, 2011 Evaluate Energy Weekly: June 24, 2011
    Total completes solar power deal aligning green energy, green dollar principles, June 17, 2011 Evaluate Energy Weekly: June 17, 2011
    ExxonMobil ups stake in US natural gas bet, June 10, 2011 Evaluate Energy Weekly: June 10, 2011
    Marathon oil delves further into Eagle Ford Shale, June 3, 2011 Evaluate Energy Weekly: June 3, 2011
    Hungarian gov't takes stake in MOL back home, May 27, 2011 Evaluate Energy Weekly: May 27, 2011

    EvaluateEnergy tracks every global upstream deal on a daily basis, estimating normalized deal value, in-depth financial and operating detail behind each deal and an explanation and opinion on deal rationale. Normalized deal value reveals underlying reserve values.

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    Monthly Update

    In the largest transaction from January 17 to February 16, Calgary-based Baytex Energy Corp. announced a $2.3 billion deal with Australian-listed Aurora Oil & Gas to capture a prized Eagle Ford position. On the conventional side, Occidental's $1.4 billion sale of its famous Kansas Hugoton field demonstrates the shifting nature of Big Oil's portfolios toward unconventional oil growth areas while some companies continue to buy long-lived gas.


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