GlobalData’s latest report, ‘Monthly Upstream Deals Review – May 2017’, shows that a combined value of $10.7bn in mergers and acquisitions (M&A) were announced in the upstream sector in May 2017. This was a significant increase of 43 percent from the $7.5bn in M&A deals announced in the previous month.

A year-on-year comparison shows an increase of 10 percent in deal value in May 2017, when compared to May 2016’s value of $9.7bn. Of the total value, conventional acquisitions were worth $7.9bn; and unconventional acquisitions were worth $2.8m. The month recorded 13 oil and gas M&A deals with values greater than $100m, together accounting for $7bn.

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Neptune Oil & Gas’ agreement to acquire a 70% stake in Engie Exploration & Production (EPI), from Engie, for a purchase consideration of approximately $5.1bn, was one of the top deals registered in May 2017. EPI is a North West Europe-focused oil and gas company and operates approximately 60 producing oil and gas fields.

As of December 31, 2016, EPI has proved and probable (2P) reserves of 672 mmboe. EPI had production of 148 mboed in 2016. Zaoui & Co Ltd., BNP Paribas (Suisse) SA, and Citigroup Inc. are acting as financial advisors to Neptune Oil. The transaction will enable Neptune Oil to expand its oil and gas business operations. The transaction implies values of US$49,350 per boe of daily production and US$10.89 per boe of 2P reserves.

Upstream M&A Deal Value and Count, May 2017

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On the volume front, the number of M&A deals increased by 31 percent from 48 in April 2017 to 63 in May 2017, of which 21 were cross border transactions and the remaining 42 were domestic transactions. Americas was the destination of choice for cross-border M&A activity in May 2017, recording 13 cross-border transactions in the month.

Regionally, Americas led the global M&A market in terms of volume, with 45 deals, representing 71 percent of the global deals in May 2017. The Europe, Middle East and Africa registered 10 deals, or 16 percent of the total, with of a combined value of $6.5bn; while APAC recorded eight deals, or 13 percent of the total, with a value of $24.5m in May 2017.