GlobalData’s latest report, ‘Monthly Upstream Deals Review – January 2018’, shows that a combined value of $4.5bn in mergers and acquisitions (M&A) were announced in the upstream sector in January 2018.

This was a decrease of 38% from the $7.2bn in M&A deals announced in the previous month. A year-on-year comparison shows a substantial decrease of 79% in deal value in January 2018, when compared to January 2017’s value of $21.6bn.

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Of the total value, conventional acquisitions were worth $2.1bn, and unconventional acquisitions were worth $2.4bn. The month recorded nine oil and gas M&A deals with values greater than $100m, together accounting for $3.8bn.

WPX Energy’s agreement to sell its oil and gas assets located in the Gallup oil play area in San Juan Basin, New Mexico, US to Enduring Resources for a cash consideration of $700m was one of the top deals registered in January 2018.

The assets cover an area of approximately 105,000 net acres located in Rio Arriba, San Juan, and Sandoval counties. The production from the assets was approximately 10,800 barrels per day (bd) of oil, during the third quarter of 2017.

Following the completion of the transaction, WPX Energy will exit its operations from San Juan Basin and will focus on Permian and Williston basins. CIBC Griffis & Small is acting as financial advisor and Holland & Hart LLP is acting as legal advisor to WPX Energy in the transaction.

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The transaction implies values of $64,814.82 per barrel of oil equivalent (boe) of daily production and $6,666.67 per net acre of land.

Upstream M&A deal value and count, January 2018

Source: GlobalData Oil & Gas Deals Analytics

On the volume front, the number of M&A deals decreased by 42% from 74 in December 2017 to 43 in January 2018, of which 11 were cross-border transactions and the remaining 32 were domestic transactions. The Americas represented the destination of choice for cross-border M&A activity in January 2018, recording six cross-border transactions in the month.

Regionally, the Americas led the global M&A market in terms of volume and deal value, with 31 deals worth a combined value of $2.8bn, representing 72% of the global deals and 62% of the total value in January 2018. Europe, the Middle East and Africa (EMEA) registered nine deals or 21% of the total, of a combined value of $989.8m; while Asia-Pacific recorded three deals, or 7% of the total, with a value of $751m in January 2018.