GlobalData’s latest report, ‘Monthly Upstream Deals Review – June 2017’, shows that a combined value of $12.1bn in mergers and acquisitions (M&A) were announced in the upstream sector in June 2017. This was an increase of 8% from the $11.2bn in M&A deals announced in the previous month. A year-on-year comparison shows a decrease of 11% in deal value in June 2017, when compared to June 2016’s value of $13.6bn. Of the total value, conventional acquisitions were worth $214.4m, and unconventional acquisitions were worth $11.9bn. The month recorded nine oil and gas M&A deals with values greater than $100m, together accounting for $11.6bn.
EQT’s definitive agreement to acquire all of the outstanding shares of Rice Energy for a purchase consideration of $8.2bn was one of the top deals registered in June 2017. Rice Energy owns 187,000 Marcellus shale net acres, 64,000 Upper Devonian shale net acres, 105,000 Utica shale net acres, and 65,000 Utica shale net acres. As of December 31, 2016, the company has proved (1P) reserves of 4,005 billion cubic feet of gas equivalent (bcfe) and proved developed reserves of 2,178 bcfe. The company has estimated production of 1.3 billion cubic feet of gas equivalent per day (bcfed) for the year 2017.
Citigroup Global Markets Inc. is acting as financial advisor and Wachtell, Lipton, Rosen & Katz is acting as legal advisor to EQT. Barclays Capital Inc. is acting as financial advisor and Vinson & Elkins LLP is acting as legal advisor to Rice Energy in the transaction. The transaction will enable EQT to strengthen its oil and gas business operations in the US.
Upstream M&A Deal Value and Count, May 2017
On the volume front, the number of M&A deals decreased by 36% from 67 in May 2017 to 43 in June 2017, of which 14 were cross border transactions and the remaining 29 were domestic transactions. The Europe, the Middle East, and Africa (EMEA) was the destination of choice for cross-border M&A activity in May 2017, recording six cross-border transactions in the month.
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Regionally, Americas led the global M&A market in terms of volume and value, with 25 deals worth a combined value of $11.9bn, representing 58% of the global deals and 98% of the global M&A value in June 2017. EMEA registered 10 deals, or 23% of the total, with of a combined value of $124.5m; while Asia-Pacific recorded eight deals, or 19% of the total, with a value of $11.4m in June 2017.