Worldwide upstream mergers and acquisitions value in 2002

Jan 14, 2003 01:00 AM

Global upstream oil and gas mergers and acquisitions (M&A) transaction value dropped to $ 46.1 bn in 2002 from $ 81.8 bn in 2001 in part due to the absence of "mega-mergers," according to John S. Herold, the independent energy research and consulting firm. Excluding the ConocoPhillips merger, 2001 transaction value was $ 55.9 bn, 21 % above the 2002 level.
US implied reserve values dipped to $ 6.00/boe from the record high $ 6.99 in 2001, but remained at historically strong levels. US deal value and deal count fell to five-year lows, although activity in the Mid-Continent and onshore Gulf coast remained strong.

Canadian implied reserve values dropped 14 % to $ 5.63/boe, driven down by the heavy oil component of the PanCanadian/Alberta Energy merger that formed EnCana. Royalty trusts propped up Canadian deal count, acquiring highly developed, shorter-lived reserves at relatively high implied costs.
Activity continued to climb in the North Sea, as Herold recorded 14 transactions totalling $ 9.1 bn, nearly double the 2001 total. The trend continued into 2003, with Apache's recent acquisition of BP's interests in the giant Forties field.

Deal activity in the rest of the world rose, but implied reserve values fell 38 % to $ 1.67/boe on a plethora of deals involving undeveloped properties in frontier regions. Deal value outside of North America and the North Sea accounted for 33 % of total worldwide deal value, down from 43 % in 2001 but up from 17 % in 2000.
John S. Herold's comprehensive M&A Database revealed that the PanCanadian/Alberta Energy merger was the biggest upstream transaction in 2002 at $ 8.8 bn, followed by Shell's $ 6.8 bn acquisition of Enterprise Oil. Rounding out the top five were Petrobras' $ 2.2 bn agreement to buy the controlling stake in Perez Companc, PetroCanada's $ 2 bn purchase of Veba Oil's upstream assets, and Tyumen Oil's purchase of $ 1.7 bn in assets from the Government of Russia and Slavneft.

Source: OGI
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