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Global oil mergers market: Deals value reaches $99 billion in Q4 2012

Press Release   •   Feb 22, 2013 14:07 GMT

The global oil mergers market value grew 114% between Q3 2012 and Q4 2012. This was seen as an increase from $46.3 billion in Q3 2012 to $99.4 billion in Q4 2012. The average value of a deal in the global oil mergers market also increased, from $457.2 million in Q3 2012, to $801.6 million in Q4 2012. There are a number of factors which have can account for this dramatic rise between quarters. There have been a number of high value deals in the past quarter, including Rosneft's agreement to acquire TNK-BP in two separate transactions, and Freeport-McMoRan's agreement to acquire Plains Exploration & Production. The number of deals also registered a marginal increase of 8% with 193 deals in Q4 2012, as compared to 178 deals in Q3 2012.

M&As in the upstream energy sector accounted for 47% of the total deals and 85% of deal value, with 91 deals worth $84.6 billion in Q3 2012. Of the total deals in upstream energy sector, 60 deals were registered in the conventional segment and 31 were deals registered in the unconventional segment. M&As in the equipment and services sector registered a considerable decrease in deal value from $11.7 billion in Q3 2012 to $6.4 billion in Q4 2012. The number of deals also recorded a decrease to 71 in Q4 2012 from 76 in Q3 2012.

North America recorded the highest deal activity, accounting for 51% of the total deals and 28% of the total deal value with 100 deals worth $28.3 billon in Q3 2012, followed by Europe with 46 deals (constituting 24% of the total M&A deals) worth $64.8 billion (constituting 65% of the total M&A deal values). In North America, upstream energy sector registered 41 deals, of which 23 were registered in the conventional segment and 18 were registered in the unconventional segment.

Asset transactions in the oil & gas industry registered an increase of 15% in the number of deals and a substantial increase of 59% in deal value with 310 deals worth $50.2 billion in Q4 2012, as compared to 269 deals worth $31.6 billion in Q3 2012. On a year-on-year basis, deal values increased substantially from $22.4 billion in Q4 2011 to $50.2 billion in Q4 2012. The number of deals also registered a marginal increase of 12% to 310 in Q4 2012 from 277 in Q4 2011.

The upstream energy sector accounted for 79% of the total number of asset transactions and 68% of the deal value with 254 deals worth $35.6 billion in Q4 2012. Of the total, 178 deals worth $24.5 billion were registered in the conventional segment and the remaining 76 deals worth $11.1 billion were registered in the unconventional segment.

North America registered 179 deals, which accounted for 58% of the deals in Q4 2012. Of the total, 112 deals were registered in the US, with 39 deals in the prolific oil and gas zones of Texas, followed by 10 deals in California and nine deals in Colorado.

The average cost ($) of production per barrel of oil equivalent per day (boepd) incurred by companies for the acquired upstream assets/companies registered an increase from $77,802 per boe of daily production in Q3 2012 to $94,844.7 per boe of daily production in Q4 2012. For 1P or proved reserves, the average implied deal value increased from $14.4 in Q3 2012 to $22.8 in Q4 2012, while the average implied deal value for 2P or proved plus probable reserves increased from $9.6 in Q3 2012 to $14.2 in Q4 2012.

ONGC Videsh's agreement to acquire 8.4% interest in Kashagan field from ConocoPhillips for $5 billion, SapuraKencana Petroleum's agreement to acquire Seadrill's Asian Tender Rig business for $2.9 billion, Sheridan Production's agreement to acquire oil and gas assets in Permian Basin from SandRidge Energy for $2.6 billion and Total's agreement to sell 20% stake in OML 138 block to Sinopec for $2.5 billion were some of the high value asset transactions recorded in Q4 2012.

For more information on the Global oil mergers market, please click here: Global Oil Mergers Market
For more information on the Energy and Utilities market, please click here: Energy and Utilities Market

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