Global ma h1 2012-final


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Global ma h1 2012-final

  1. 1. GLOBAL E&P TRANSACTIONS H1 2012 REVIEW Slowdown continues, deal value trending four-year low JULY 2012This document is joint property of Derrick Petroleum Services and PLS. References and citations to the document are encouraged but distribution or copying in any forms, in parts or full requirepermission from the owners. The information and analyses presented in this document are based on proprietary data contained in Derrick Petroleum Services’ Global E&P Transactions Database andgeneral industry and company research. The document is not intended to be used on a stand-alone basis but in combination with other material or in discussions and is subject to revisions. DerrickPetroleum Services and PLS are not responsible for actions taken based on information in this document.
  2. 2. Slowdown continues, deal value trending four-year lowSlowdown continues, deal Global M&A deal values in H1 2012 stood at $62 billion which included only $25 billion in Q2 2012 – one of thevalue at four-year low lowest quarters since Q3 2009. The annualized deal value run rate at $124 billion, is higher only than the $117 billion seen in 2008. Number of large value deals (>$100 million) in Q2 2012 was stable at 44, in line with the previous 5 quarters.US remains top region, United States with $29.2 billion or 48% of total upstream deal value, continued to be the top region during H1Canada’s share at a record 2012. Canada maintained its second position with deals worth $17.1 billion or 28% of the total upstream dealhigh value in H1 2012, surpassing its full year 2011 value.Corporate deals steady during Corporate deals and transactions involving producing fields accounted for 46% and 30%, respectively of theH1 2012, Increased focus on total deal value in H1 2012, in line with deals in 2010 and 2011. 86% of the Corporate deals weighted towardsGas assets Gas assets including Oil + Gas and CBM.M&A in Conventional assets In H1 2012, share of conventionals in the total deal value was 46% – dropping below 50% for the first timefalls below 50% since 2007.Chinese remain silent in H1, The share of acquisitions by Chinese NOCs was relatively lower at 4% of the total deal value in H1Asian NOCs on big ticket 2012, whereas the share of Asian NOCs jumped with Petronas, KNOC and PTTEP joining the acquisitionacquisitions spree. The Chinese are making a come back with CNOOC set to takeover Nexen for $17.9 billion and Sinopec acquiring Talisman’s North Sea assets for $1.5 billion, both in July 2012.Supply of assets crosses $100 The total value of all oil and gas assets currently on the market (Deals in Play) was $105 billion at thebillion, BP’s stake in TNK-BP beginning of July 2012, 19% higher than the supply at the beginning of April 2012 and marginally above $101for sale billion at the beginning of 2012.2
  3. 3. Global upstream M&A slows down considerably 211 Kinder Morgan – ElIn Q2 2012, the total upstream Value of global E&P transactions Paso E&P assetsM&A deal value reached $25 USD billion 7.2 176*billion. This is the lowest since 71 150 169Q3 2009 ($19 billion) and is 147comparable to the slow quarters 48such as Q4 2008, Q1 2008 and 37 117 66 44Q1 2007. In H1 2012, the total 19deal value touched $62 34 47billion, 17% lower than $74 billion 43 19 46 62in H1 2011. The annualized deal 32value run rate at $124 billion, is 61 32 25 33only higher than $117 billion in 50 432008. 23 33 36 15 Q1 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q3 Q4 Q1 Total Q1 Total Q1 Total Total Q2 Total Q2 H1Number of large value deals(>$100 million) was stable at 44in Q2 2012 and in line with the * Including the value of El Paso E&P assets First Half of the yearprevious 5 quarters. Of the 44high value deals in Q2 2012, only5 were greater than $1 billion – Number of transactions, split by high and low value dealsthe lowest since 2009. High Value Deals (>$100 million) Low Value Deals (<$100 million) Undisclosed deal value 134The number of low value deals 134(<$100 million) and deals with 96 123 114 86undisclosed values were 93 and97, respectively, declining in line 77 82 85 90 74 97with the overall slowdown 90 87 71 86 96 75observed during this quarter. 65 130 178 61 167 155 145 139 64 111 101 106 92 85 117 90 89 48 99 93 85 75 85 44 70 44 69 47 53 43 50 47 42 54 59 49 42 49 47 49 50 44 31 38 24 35 36 18 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2007 2008 2009 2010 2011 20123
  4. 4. Top 20 global deals - corporate deals continue to dominateThe largest deal of H1 2012 was Value of top 20 global E&P transactions in H1 2012the divestment of El Paso’s E&Passets by Kinder Morgan to a USD million Kinder Morgan divests El Pasos E&P assets 7,150#consortium of Private Equityinvestors led by Apollo Petronas acquires Progress Energy Resources 5,386#Global, Riverstone, AccessIndustries and KNOC for $7.15 Mitsubishi acquires 40% in Encanas Cutbank Ridge 2,898billion. Overall, the top 10 deals Apache acquires Cordillera Energy 2,850#accounted for nearly half the totaldeal value in H1 2012. Devon and Sinopec form JV for five unconventional plays in US 2,200 Mitsubishi and Mitsui acquire 14.7% in Browse LNG from Woodside 2,000Other significant deals in the USincluded Apache acquiring Pengrowth Energy acquires NAL Energy 1,909#Cordillera for $2.85 billion andDevon and Sinopec forming a JV PTTEP to acquire Cove Energy 1,756#across five unconventional plays ConocoPhillips divests Vietnam assets to Perenco 1,290in US for $2.2 billion. SandRidge acquires Dynamic Offshore Resources 1,275#Prominent deals in Canadainclude Petronas acquiring Linn Energy acquires BPs Kansas assets 1,200Progress for $5.39 billion and Halcon Resources acquires GeoResources 1,031#Mitsubishi acquiring 40% interestin EnCanas Cutbank Ridge Linn Energy acquires Wyoming property from BP 1,025assets for $2.9 billion. Three Rivers divests Permian basin assets to Concho Resources 1,000International deal activity was SPDC divests interest in OML 30 to Shoreline and Heritage 850seen across Australia, EastAfrica and Vietnam - Mitsubishi Marathon Oil acquires Paloma Partners II LLC 750#and Mitsui acquired 14.7% in Chesapeake sells Texas Panhandle Granite Wash VPP 745Browse LNG for $2billion, PTTEP acquired Cove Harvest Natural Resources divests Venezuela assets to Pertamina 725Energy outbidding Shell, andConocoPhillips divested its ENI sells 5% stake in Galp to Amorim Energia 713#Vietnam assets to Perenco for Athabasca Oil Sands divests 40% in MacKay River project 667 # Corporate Deals$1.29 billion.4
  5. 5. Regional M&A activity – Canada’s share at a record high 1.9United States, with $29.2 billion Annual transaction value by region 9.4or 48% of total upstream deal 9.9 USD billion 11.8value, continued to be the topregion during H1 2012. US was 2.9 32.1also dominant during 2011 with 9.5 0.7 1.6deals worth $82.8 billion 7.6 11.5 15.5accounting for 49% of the total 29.0 13.0deal value. 35.7 19.9 12.6 2.5 7.2 20.6 14.8Canada maintained its second 7.0 9.4 6.5 35.0 16.8position with deals worth $17.1 34.8billion or 28% of the total 3.1 3.2 35.4 9.1upstream deal value in H1 1.8 0.9 15.32012, surpassing its full year 82.8 2.6 3.32011 value. Overall, the share of 75.2 17.1Canadian deals is at the 61.6 49.6 47.5highest, nearly tripling from 10% 29.2during 2011. 2007 2008 2009 2010 2011 H1-2012North Sea/Europe, at the third United States Canada North Sea/ Europe South/Central America Former Soviet Union Asia Africa Australia Middle Eastposition, totalled $3.3 billion from28 deals with the highestcontributor being Cairn’s offer forNautical Petroleum. Annual transaction value % by region USD billionAfrica, Australia and Asia sawlarge deals such as PTTEP’s 2007 2008 2009 2010 2011 H1-2012acquisition of Cove, Mitsubishi 100%=$147Bn 100%=$117Bn 100%=$150Bn 100%=$211Bn 100%=$169Bn 100%=$62Bnand Mitsui’s acquisition of 14.7% 5% 5% 5%in Browse LNG, and Perenco’s 10% 6% 6% 5% 7%acquisition of ConocoPhillips’ 18% 24% 34% 36% 8%Vietnam assets, respectively. 6% 41% 13% 41% 15% 5% 49% 48% 7% 7% 5% 14% 28% 6% 24% 23% 16% 9% 8% 13% 10%5
  6. 6. Corporate deals steady during H1 2012, Increased focus on Gas assetsCorporate deals and transactions Deals by type of transactioninvolving producing fieldsaccounted for 46% and 2007 2008 2009 2010 2011 H1-201230%, respectively of the total 100%=$147Bn 100%=$117Bn 100%=$150Bn 100%=$211Bn 100%=$169Bn 100%=$62Bndeal value in H1 2012, in linewith the trend observed in 2010 7% 7% 5% 8% 10% 7%and 2011. 26% 15% 21% 20% 14% 37% 33% 42% 47% 46%86% of the Corporate deals wereweighted towards Gas assets 48% 32% 73% 31% 28% 30%including Oil + Gas and CBM.Mitsubishi was involved in Corporate M&A Producing fields Fields under development Discoveries (Undeveloped) Mix of asset typesacquiring interests in two fieldsunder development, EnCanas Corporate deals with transaction value >$1 billionCutbank Ridge assets and USD millionWoodside’s Browse LNG project. Kinder Morgan divests El Pasos E&P assets 7,150 Petronas acquires Progress Energy Resources 5,386 Apache acquires Cordillera Energy 2,850 Pengrowth Energy acquires NAL Energy 1,909 Gas PTTEP to acquire Cove Energy 1,756 Oil + Gas SandRidge acquires Dynamic Offshore Resources 1,275 Halcon Resources acquires GeoResources 1,0316
  7. 7. M&A in Conventional assets falls below 50%In H1 2012, the share of Share of conventional and unconventional dealsconventionals in the total dealvalue was 46% - dropping below 2007 2008 2009 2010 2011 H1-201250% for the first time since 2007. 100%=$147Bn 100%=$117Bn 100%=$150Bn 100%=$211Bn 100%=$169Bn 100%=$62BnDuring H1 2012, of the 94 deals 6% 6% 15% 14%with a transaction value >$100million, the number of deals 22%involving conventional assets (59 90% 24% 60% 34% 51% 68% 39% 57% 50% 46%deals) was significantly higherthan that of deals involvingunconventional assets (35deals). But deals >$1 billion were Conventional Shale/Tight Gas Oilsands CBMdistributed equally, at 7 each forconventional and unconventional. Number of deals with transaction value >$1 billionFor unconventional deals >$100 39million, US outpaced Canada Conventionalboth in terms of volume and total Unconventionaldeal value. The number of dealsin US and Canada totalled 24 31and 10, respectively, and thetotal deal value was $21 billionand $11 billion, respectively. 19 19 18 15 14 11 7 7 6 3 2007 2008 2009 2010 2011 H1-20127
  8. 8. NOC acquisitions continue, Petronas and PTTEP joinIn H1 2012, Asian NOCs, namely Acquisitions by Chinese and other Asian NOCs SinochemPetronas, KNOC and USD billion CNPC (China)PTTEP, joined their Chinese ONGC (India)peers in high value deals. 3.1 Sinopec (Listed) PTTEP (Thailand)KNOC joined Apollo 2.5 GAIL (India) LtdGlobal, Riverstone and Access 2.3Industries in acquiring El Paso’s CNPC (Petro-China) 1.7E&P assets. Large NOC deals Petronasincluded Petronas’ acquisition of 4.1 KNOC (KOREA)Progress Energy, PTTEP 1.1 CNOOC (China)outbidding of Shell for Cove 0.8 3.0 China Investment CorpEnergy, the formation of the 7.4 SinopecSinopec-Devon JV for five US 5.2 3.3unconventional plays and 0.8CNPC’s (Petro-China) 4.3 4.7acquisition of 40% in the MacKay 2.8 1.8River project. 0.8 0.7 1.8 15.2 5.4 2.7 11.2The share of acquisitions by 8.5Chinese NOCs were relatively 1.4lower at 4% of the total deal 2.6 2.2value in H1 2012, whereas the 2007 2008 2009 2010 2011 H1-2012share of Asian NOCs jumped.The Chinese are making a comeback, with CNOOC set to 2007 2008 2009 2010 2011 H1-2012takeover Nexen for $17.9 billion 100%=$147Bn 100%=$117Bn 100%=$150Bn 100%=$211Bn 100%=$169Bn 100%=$62Bnand Sinopec acquiring 1% 6% 3% 3% 3%Talisman’s UK North Sea 5% 12% 15% 11% 14%business for $1.5 billion, both in 4%July 2012. 99% 90% 85% 82% 86% 82% Asian NOC Chinese NOC Others 0% 0% 0%8
  9. 9. Supply of assets back at $100 billion+, BP’s stake in TNK-BP for saleThe total value of all oil and gas ExxonMobil to exit Block 31 in Angola Chesapeake seeks JV partner for Mississippian playassets currently on the market BP to sell certain UK and Norway North Sea assets and Bakken/Three Forks acreage(Deals in Play) was $105 billion including 18.36% in Draugen field Chesapeake to sell acreage in Utica and Michiganat the beginning of July 2012, ConocoPhillips to divest assets worth $5-10 billion Chesapeake to divest Permian basin assets19% higher than the supply at Eni to sell interest in Mamba gas discovery offshore EOG Resources to sell non-core assetsthe beginning of April 2012 and Mozambique Marathon to sell minority stake in GoMmarginally above $101 billion at Lukoil seeks partner for West Qurna-2 project Newfield Exploration to divest GoM assetsthe beginning of 2012. Maurel & Prom, Svenska Petroleum and EnCana seeks JV partner to develop fourThe higher value of Deals in Play Calvalley Petroleum put up for sale unconventional plays Angolain Q2 2012 is on the back of BP’s Marathon to divest 10% interest in 6% EnerVest and EV Energy seek JV partnerplan to divest its 50% stake in Block 32, offshore Angola Argentina for Utica acreageTNK-BP, estimated to fetch a Itera to divest strategic stake 7%mammoth $20 billion. Tullow Oil to divest Asian United States Cenovus Energy seeks JV partner to assets 23% develop Alberta oilsands assetsRegionally, US offers the largest Australia RWE to sell Egypt assets 11% Koch Industries seeks partners forvalue of Deals in Play followed Alberta oilsands propertiesby Russia, Canada, Australia, 100% = $105 billion BP to sell 60% stake in Shell to divest Orion oilsandsArgentina and Angola. Pan American Energy project Ecopetrol to sell certain Canada Others Talisman to sell non-core assetsNotable deals in play announced 16% Colombian assets 19% Apache to divest certain Canadianduring the last quarter includedPetrobras’ interests in deepwater BPZ to farm-out interest conventional assets BPs stake inGoM blocks and ConocoPhillips in Peru and Ecuador assets ConocoPhillips to divest certain assets TNK-BPplanning to exit Nigeria. 18% in Alberta and British Columbia Rosneft seeks partner to develop Connacher Oil and Gas, WestFire Energy Carabobo oil block and Fairborne Energy consider strategic alternatives Vale to divest oil and gas assets EnCana seeks JV partner for unconventional gas Shell to divest remaining stake in Woodside Origin Energy and ConocoPhillips to sell additional stake in Queensland’s APLNG project Beach Energy seeks partners for Cooper Basin shale gas project Dart Energy seeks partners for Australian CBM assets InterOil seeks partners for Gulf LNG project in PNG9
  10. 10. CONTACT DETAILSDerrick Petroleum Services is an independent oil and gas research PLS, Inc. is a leading industry research, transactions andand consulting firm based in Bangalore, India. The Company’s advisory firm based in Houston, Texas. PLS publishesresearch and databases have worldwide coverage, with special various information reports on mergers, acquisitions,emphasis on emerging plays and international transactions. divestments, capital markets, exploration, drilling and midstream services and manages a multiple listing service for assets on the market.Contact person (Asia) Contact person (Europe) Contact personYashodeep Deodhar Anders Wittemann Ronyld 98 456 55034 +47 9160 6475 +1 713 658 9421