Look Towards A New Future

Feb 8, 2012

Oil & Gas Quarterly Deals Analysis - M&A and Investment Trends, Q4 2011

M&A Activity Increased In The Oil And Gas Market In Q4 2011

M&As, which include change in ownership and control of companies (GlobalData does not consider this value as a new investment in the market), in the oil and gas industry recorded an increase in Q4 2011. The oil and gas industry registered an increase of 17% in the number of deals and 31% in deal value with 169 deals worth $70.2 billion in Q4 2011, as compared to 144 deals worth $53.4 billion in Q3 2011. Kinder Morgan’s agreement to acquire El Paso for $37.8 billion was the major deal that led a substantial increase in deal values in the midstream sector in Q4 2011. The transaction valued the midstream assets of El Paso at $31.8 billion and the upstream assets at $6 billion.

The industry registered eight high-value deals of over $1 billion in Q4 2011, which accounted for 80% of the total deal value in the quarter. North America accounted for nearly half of the M&A deals in the oil and gas industry with 78 deals in Q4 2011, up 8% over the previous quarter’s 72 deals. Asia-Pacific recorded an increase with 36 deals in Q4 2011, up 57% from 23 deals in Q3 2011.

M&As in the upstream and midstream sectors registered an increase in the number of deals with 75 and 34 deals respectively in Q4 2011, as compared to 53 and 20 deals respectively in Q3 2011.

Oil & Gas Investment Trends Analysis

Published: February 2012
No. of Pages: 61
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According to Swati Singh, Lead Analyst at GlobalData, “M&A activity in the Oil & Gas industry rose in 2011 as compared to 2010 both in terms of deal volume and the total deal value. Oil and gas companies struck 657 M&A deals worth $278 billion, compared with 638 M&A deals worth $217 billion recorded in 2010. The top 15 M&A transactions accounted for 44% of the total deal value on 2011; the largest transactions included Kinder Morgan's acquisition of El Paso for $37.8 Billion and BHP Billiton acquisition of Petrohawk Energy for $15.1 Billion. With crude oil prices stabilizing above $95 a barrel, the positive trend that we have seen in the recent months is likely to continue into 2012 with Asian companies expected to be the major players in the M&A landscape. Major IOCs and Asian National Oil companies are expected to drive M&A investment in unconventional oil and gas sector to offset their output declines from mature assets and to secure energy supplies.”