A combined value of US$25.1 billion in mergers and acquisitions (M&A) were announced in the upstream sector in December 2016. This was an enormous increase from the US$4.5 billion in M&A deals announced in the previous month. A year-on-year comparison shows a substantial increase in deal value in December 2016, when compared to December 2015’s value of US$4.8 billion. Of the total value, conventional acquisitions were worth US$5.6 billion; and unconventional acquisitions were worth US$19.5 billion. The month recorded 16 oil and gas M&A deals with values greater than US$100 million, together accounting for US$24.5 billion.
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Diamondback Energy’s agreement to acquire oil and gas assets located in Pecos and Reeves counties of the Delaware Basin, Texas, the US, from Brigham Resources, for a purchase consideration of approximately US$2.4 billion, was one of the top deals registered in December 2016. The assets include 81% working interest in 93,761 gross (76,319 net) acres, of which 1,149 acres are net royalty acres. The average net production from the assets is 9,482 boed (77% oil) from 48 gross producing horizontal wells and 16 gross producing vertical wells, during November 2016. Following the completion of the transaction, Diamondback Energy’s acreage position will be increased to approximately 182,000 net acres in the Permian Basin. The transaction will enable Diamondback Energy to strengthen its oil and gas assets base in the Delaware Basin, Texas. The transaction implies values of US$256,232.86 per boe of daily production and US$32,321.4 per net acre of land.
On the volume front, the number of M&A deals increased by 7% from 57 in November 2016 to 61 in December 2016, of which 18 were cross border transactions and the remaining 43 were domestic transactions. EMEA and Americas were the destination of choice for cross-border M&A activity in December 2016. Both the regions recorded eight cross-border transactions each.
Regionally, Americas led the global M&A market in terms of volume, with 43 deals, representing 70% of global deals, in December 2016. EMEA registered 14 deals, or 54% of the total, with of a combined value of US$13.5 billion; while Asia-Pacific recorded four deals, or 7% of the total, with of a combined value of US$314.3 million in December 2016.
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About this report
GlobalData's “Monthly Upstream Deals Review – December 2016” report is an essential source of data and trend analysis on M&A (mergers, acquisitions, and asset transactions), in the upstream oil and gas industry. The report provides detailed comparative month-on-month data, on the number of deals and their value, sub-divided into deal types by geographies.
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