HOUSTON — The Eagle Ford Shale drew $8.8 billion in upstream oil and gas deals in 2013, the largest value in the country, according to a new PLS report.
The shale play in South Texas also was the site of the year’s largest energy deal, with Devon Energy’s $6 billion Eagle Ford land grab announced in November, the Houston-based research firm noted.
In West Texas, unconventional regions of the Permian Basin were targets of the second-largest disclosed value of deals, a total of 7.5 billion. Other high-value regions included, in order of disclosed deal totals:
- Rockies conventional plays, $5.5 billion
- Gulf of Mexico shelf, $4.2 billion
- Bakken Shale, $2.9 billion
Deal value declines
These multibillion-dollar numbers notwithstanding, 2013 brought the lowest total deal value in global upstream oil and gas since 2008.
Upstream companies, which produce and explore for oil and gas, spent $138 billion to expand their assets and buy other firms in 2013, according to PLS. That’s a 49 percent drop from 2012, when the industry recorded $271 billion in value-disclosed deals.
The decline largely occurred in North America, where the land grab that characterized the early U.S. shale boom has waned.
The disclosed value of upstream oil and gas deals in North America totaled $62.9 billion in 2013, down from$143 billion the year before.
Meanwhile, oustide of the United States, asset sales (not including corporate deals) set a record value of $66.3 billion in 2013, according to the report.
In Africa, total disclosed deal value jumped 50 percent to $20.3 billion in 2013. In Asia, deal value grew 35 percent to $5.3 billion. In South America, it grew 88 percent to $9.2 billion.
“Looking at the international markets outside of the United States, asset transactions remained strong in 2013,” said Derrick Petroleum Services Director Mangesh Hirve in a written statement. Derrick Petroleum Services partnered with PLS on the report.
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Deal value declined in Australia by 82 percent to $2.5 billion; in Europe by 47 percent to $5.7 billion; in the Middle East by 98 percent to $3.1 billion; and in the former Soviet Union by 59 percent to $31.2 billion.
The total number of 2013 deals also declined, to 1,028 from 1,235 in 2012.
PLS Managaing Director Brian Lidsky noted in the report that the results could be skewed since the value of some deals is not made public. (643 deals had disclosed values in 2013.)
Also, 2012 included three megadeals that significantly increased that year’s total, including Rosneft’s $61 billion acquisition of TNK-BP.
“2013 actually is a year in which upstream oil and gas M&A activity by and large reverted back to the mean of the last several years of activity, after adjusting for the megadeals,” Lidsky said in a written statement. “Overall, the market remains healthy with ample deal flow and a host of motivated buyers.”
Three of the year’s five biggest upstream oil and gas deals occured in the United States:
- In November, Devon Energy announced plans to buy South Texas assets from GeoSouthern for $6 billion.
- In February, Linn Energy announced plans to buy Berry Petroleum for $4.9 billion.
- In July, Fieldwood Energy announced plans to Gulf of Mexico assets from Apache for $3.75 billion.
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