$21 Billion in Oil & Gas Deals Announced First Quarter 2013
Market Slows From Record $141 Billion in Q4 2012
(firmenpresse) - HOUSTON, TX -- (Marketwired) -- 04/12/13 -- PLS Inc.
Market takes a breather after Q4 2012 buying binge, lowest quarterly deal value since at least Q1 2007
Deal inventory growing, over $116 billion of deals in play -- up from $85 billion at start of 2013
Linn Energy's $4.3 billion buy of Berry Petroleum largest in quarter and opens door to further upstream C-Corp purchase by MLPs
Chinese NOC's buying continues, takes 41% share of market
. ("PLS"), a Houston-based research, transaction and advisory firm, in conjunction with its international partner, Derrick Petroleum Services ("Derrick"), announced that global M&A activity for Q1 2013 slowed to $20.6 billion in 106 separate transactions with deal values disclosed. This compares to a record $140.9 billion in 208 deals in Q4 2012 and $41.9 billion in 197 deals in Q1 2012. The Q1 2013 quarterly deal value is the lowest since at least Q1 2007 ($21.8 billion) while the Q1 2013 deal count is the lowest since the record of 64 deals in Q1 2009 (the quarter following the U.S. market crisis).
Source: . Only includes deals with price disclosure.
According to , PLS Managing Director, "After a record level of activity late in 2012 due to U.S. fiscal cliff concerns, the oil and gas deal markets slowed dramatically in early 2013 as buyers digested their acquisitions. Deal activity slipped about 40% from the prior four-quarter average and deal inventory has grown by about a third. In North America, buyers are getting an upper hand for early stage and higher risk projects. Counter balancing this, however, are rising natural gas prices in North America. Also, highly-prized resource play positions, particularly ones that are operated, de-risked and going into full development will continue to command premiums."
Quarterly highlights include the first acquisition of a C-Corp by an upstream MLP or LLC. Linn Energy's $4.3 billion offer for Berry Petroleum. Traditionally, these buyers have been restricted to purchasing long-lived, low-risk cash flowing assets and are able to pay top dollar; through prudent hedging, cost controls and ability to tap the capital markets as necessary. Continuing the trend of Chinese NOC's buying oil and gas assets globally, three of the top five deals this quarter were bought by Chinese buyers -- two in the United States and one in Mozambique.
North America's $13.7 billion in oil and gas transactions (see Table 2) led the world accounting for 65% of transactions by dollar volume. This is up from a 61% share in Q4 2012, excluding the $61 billion Rosneft buy of TNK-BP.
Source: . Number of deals above is for deals with price disclosure. For Q1, deal count totaled 176 including deals without price disclosure.
The United States accounted for 63% of deal value and 51% of deal count. Canada saw numerous small deals and accounted for 28% of the deals though its share of deal value slipped dramatically to under 3% (compared to a trailing four-quarter global market share of 20%). In Canada, the quarter's highlight was the final approval by both Canada and the United States of CNOOC's $17.9 billion purchase of Nexen which closed on February 25, 2013 -- a deal first announced in Q3 2012.
According to Mangesh Hirve, Director, Derrick Petroleum Services, "While Canada and the United States finally approved CNOOC's acquisition of Nexen, they did so with some hesitancy. In Canada, the government signaled this to be the last deal of its kind that would grant a NOC rights to take a majority stake in Alberta's strategic oil sands. That being said, Chinese NOC's buying spree continued, taking a record 41% share of the overall market this quarter with $8.6 billion of buys. Since 2008, this latest buying brings Chinese NOCs total over the $100 billion mark to $104.7 billion."
Regionally, in terms of deal value this quarter, North America ($13.7 billion) was followed by Africa ($4.2 billion), the FSU ($1.4 billion) and Europe ($0.9 billion). All other regions tallied totals of less than $500 million.
Five deals topped $1 billion (Table 3) globally during the quarter -- four in the United States and one in Mozambique. This compares to a record 22 deals mega deals in Q4 2012.
Source:
For perspective, the average annual pace of deals greater than $1 billion from 2007-2012 is 37.
United States deal activity in Q1 2013 fell 42% to 54 transactions compared to 94 in Q4 2013 and is also down 33% from the 2012 quarterly average (Table 4). Deal value also slipped in 63% to $13.1 billion compared to Q4 2012 and is down 36% from the 2012 quarterly average.
Source: . Only include deals with values disclosed.
According to Lidsky, "While deal activity was down, several large-impact deals provide insight to current market dynamics and drivers. First, the largest deal for the quarter was Linn Energy's $4.3 billion buy of Berry Petroleum -- secured by offering a 20% premium to the prior-day closing price of Berry's stock price. This deal breaks new ground as it represents the first ever acquisition of a public C-Corp by an upstream LLC or MLP and opens up a new sector for MLP purchases, given proper structuring."
Two other deals highlight the Chinese NOCs buying trend and other market dynamics. Sinopec paid $1.02 billion for a 50% undivided interest in Chesapeake's Mississippian Lime play in Oklahoma. The deal departs from Chesapeake's normal cash-and-carry joint venture and provided Sinopec with 425,000 net acres at a price of $200 per acre -- below what many analysts had expected. In the Wolfcamp play located in the Delaware Basin of west Texas, Sinochem struck a traditional joint venture with leader Pioneer Natural Resources for $1.7 billion, implying $19,000 per acre.
Regarding United States upstream valuations, average multiples for oil are in the $110,000 per bopd or $23.00 per proved bbl (average R/P = 14 years) range. For gas, average multiples are $5,300 per Mcfpd and $1.40 per proved Mcf (average R/P = 11 years).
As of March 31, PLS and Derrick estimate that $116 billion of assets are on the market, up from the $85 billion tally on December 31.
Source: .
The United States has the largest inventory of deals on the market with an estimated at $35 billion, followed by Canada ($15 billion) and Australia ($11 billion).
Notable new deals in play this quarter include Petrobras' intent to sell its Nigerian portfolio and select assets in Brazil. Canada's Talisman intends to raise another $2 to $3 billion via sales or joint ventures and is marketing a Duvernay shale package, parts of its Montney assets in Canada and reviewing North Sea options. Hess is selling its portfolio in Indonesia and Thailand. Germany's RWE AG has hired Goldman Sachs to sell its E&P business.
PLS, Inc. and Derrick Petroleum services are partners in providing U.S., Canadian and International clients leading Global and U.S. M&A and E&P databases and services. These databases are maintained 24/7 by a team of analysts and are accessible via the web.
:
David Cohen
Managing Editor
Houston, Texas
713-650-1212
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Datum: 12.04.2013 - 21:14 Uhr
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