GlobalData’s latest report, ‘Monthly Upstream Deals Review – October 2017’, shows that a combined value of $7.9bn in mergers and acquisitions (M&A) were announced in the upstream sector in October 2017. This was a significant decrease of 38 percent from the $12.7bn in M&A deals announced in the previous month. A year-on-year comparison shows a substantial decrease of 66 percent in deal value in October 2017, when compared to October 2016’s value of $23.3bn. Of the total value, conventional acquisitions were worth $6.9bn; and unconventional acquisitions were worth $1bn. The month recorded 15 oil and gas M&A deals with values greater than $100m, together accounting for $7.6bn.

Aker BP’s agreement to acquire Hess Norge, from Hess, for a cash consideration of $2bn, was one of the top deals registered in October 2017.

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Hess Norge owns a 64.05 percent interest in the Valhall field and a 62.5 percent interest in the Hod field, both located in the Norwegian North Sea. The fields have a net production of approximately 24,000 boed (85 percent liquids), during the first nine months of 2017. As of December 31, 2016, the assets have net proved and probable (2P) reserves of 150 mmboe (85 percent liquids), and net proved and probable contingent resources of 195 mmboe (85 percent liquids). Following the completion of the transaction, Aker BP will hold 100 percent interest in both Valhall and Hod.

The transaction will enable Aker BP to strengthen its production and resource base in Norway. Hess intends to use the proceeds from the sale to repay its existing debt.

The transaction implies values of $83,333.3 per boe of daily production, $13.33 per boe of 2P reserves, and $10.26 per boe of contingent resources.

Upstream M&A Deal Value and Count, October 2017

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Source: Oil & Gas Deals Analytics                                                                   © GlobalData

On the volume front, the number of M&A deals increased by 8 percent from 49 in September 2017 to 53 in October 2017, of which 16 were cross border transactions and the remaining 37 were domestic transactions. Americas was the destination of choice for cross-border M&A activity in October 2017, recording 10 cross-border transactions in the month.

Regionally, Americas led the global M&A market in terms of volume and deal value, with 42 deals worth a combined value of $4.9bn, representing 79 percent of the global deals and 62 percent of the total value in October 2017. The Europe Middle East and Africa (EMEA) registered nine deals or 17 percent of the total, of a combined value of $2.7bn; while Asia-Pacific recorded two deals, or 4 percent of the total, with a value of $370m in October 2017.