Tag Archives: energy M&A

For oil and gas M&A, it’s a Buyers’ Market – Oil & Gas Financial Journal

For the majority of global oil & gas companies, 2016 was a tough year. Buffeted by depressed crude oil and natural gas prices, corporate profits were squeezed, sparking widespread restructurings, layoffs and, in certain cases, bankruptcies.In normal circumstances, such conditions would be a boon for merger & acquisition (M&A) activity. However, continued uncertainty over the length and severity of the commodity price downturn has created a value mismatch between buyers and sellers. The result was a moribund M&A market in the oil & gas sector. In fact, according to business advisory firm Deloitte, the first half of 2016 saw the lowest number of deals and deal value in five years.   On reflection, it’s easy to see why deal activity in the oil & gas sector slowed. Firstly, there was a notable lack of terminally distressed sellers; hedging strategies have mostly worked and companies have been able to renegotiate debt and lower operating costs. On top of this, there have been fewer funding options available, in terms of both equity and debt, for buyers of oil & gas assets.For 2017, it is very much a buyers’ market in the oil & gas sector, albeit with some caveats. Purchasers are being asked to come up with more innovative ways of structuring deals and are increasingly required to negotiate with a wider group of stakeholders. Further complicating the M&A picture is the emergence of private equity and other financial buyers who, generally unaccustomed to normal industry practice, bring a vastly different approach to risk and costs.

Source: For oil and gas M&A, it’s a Buyers’ Market – Oil & Gas Financial Journal

EOG Resources Inc. to buy private energy company in $2.5 Bil deal – HBJ

Houston-based EOG Resources Inc. (NYSE: EOG) plans to gobble up a private energy company to expand its assets in the Permian and Powder River basins.EOG announced Sept. 6 it plans to buy Artesia, New Mexico-based Yates Petroleum Corp. and some of its subsidiaries and other entities in an approximately $2.5 billion deal. Yates is a privately held crude oil and natural gas company that boasts about 1.6 million net acres across the western U.S.

Source: EOG Resources Inc. to buy Yates Petroleum Corp. – Houston Business Journal

Range Resources to Buy Memorial Resource in $4.4 Bln Deal – Fortune

Range Resources Corp said on Monday it would buy fellow oil and gas producer Memorial Resource Development Corp for $3.3 billion plus assumption of $1.1 billion in debt to expand in the Appalachian and U.S. Gulf Coast regions.Memorial Resource Development’s shareholders will receive 0.375 of a Range Resources share for each share they hold, the companies said.The all-stock deal is valued at $15.75 per share, a 17 percent premium to Memorial Resource Development’s Friday close.About 95 percent of Range Resources’ production comes from its Appalachian operations.

Source: Range Resources to Buy Memorial Resource in $4.4 Bln Deal – Fortune

Oil Patch Braces for Financial Reckoning – WSJ

U.S. energy companies have defied financial gravity for more than a year, borrowing and spending billions of dollars to pump oil, even as crude prices plummeted. Until now. The oil patch is expected to finally face a financial reckoning, experts say, with carnage occurring as early as this month. One trigger: Smaller drillers are bracing for cuts to their credit lines in October as banks re-evaluate how much energy companies’ oil and gas properties are worth. But with oil trading below $45 a barrel, bigger oil outfits are struggling to stay profitable, too.Jim Flores, vice chairman of Freeport-McMoRan Inc., which pumps oil in the Gulf of Mexico, explained the industry’s conundrum this way: “It’s raining and it’s going to rain for a long time. We’re all going to get wet. A few people are going to drown. You just have to make it to the other side.”Mr. Flores’s friend Al Walker, chief executive of Anadarko Petroleum Corp., one of the biggest oil companies in the U.S., recently told the audience at a Barclays energy conference, “Frankly at the end of the day, none of us have a great sense for where oil prices are going.”

Source: Oil Patch Braces for Financial Reckoning – WSJ

JPMorgan Chase’s oil and gas group absorbed Catalyst Energy Advisors LLC to ready for energy deals – Houston Business Journal

The Houston-based oil and gas investment banking group at JPMorgan Chase & Co (NYSE: JPM) has gobbled up Houston-based Catalyst Energy Advisors LLC, a boutique investment financial advisory, in preparation for the energy deals to come.
An internal memo sent to the Houston Business Journal said Mark Deverka, formerly the managing director at Catalyst, and Jonathan Sloan, formerly the director at Catalyst, are two of the four latest members to join the acquisitions and divestitures team within JPMorgan’s oil and gas investment banking practice.
“We know eventually this market will stabilize, and the business will bounce back to a more traditional level, and so we’re investing in human capital in anticipation of that,” said Lackland Bloom, managing director and co-head of the oil and gas investment banking group at JPMorgan.

Source: JPMorgan Chase’s oil and gas group absorbed Catalyst Energy Advisors LLC to ready for energy deals – Houston Business Journal

Halliburton, Baker Hughes extend acquisition timeline, eye more divestments – Houston Business Journal

Houston-based oilfield services giants Halliburton Co. (NYSE: HAL) and Baker Hughes Inc. (NYSE: BHI) announced late July 10 they have extended the timeframe to close their $34.6 billion megadeal.

The extension will give the Antitrust Division of the U.S. Department of Justice more time to review Halliburton’s planned acquisition of Baker Hughes. By midsummer, both companies expect to certify substantial compliance with the DOJ’s so-called “second request” for information to review the deal.

The newly announced timing agreement gives the DOJ until the later of Nov. 25 or 90 days after both companies have certified substantial compliance with the second request to review the deal. As such, Halliburton and Baker Hughes agreed to extend the time period for the closing of their deal to no later than Dec. 1. When the deal was announced in November, it was expected to close in the second half of 2015.

 

Meanwhile, Halliburton also noted it is discussing divesting more business units in addition to the previously announced sale of its Fixed Cutter and Roller Cone Drill Bits, Directional Drilling and Logging-While-Drilling/Measurement-While-Drilling businesses.

via Halliburton, Baker Hughes extend acquisition timeline, eye more divestments – Houston Business Journal.

Noble Energy to close Rosetta Resources HQ after acquisition, cut jobs – Houston Business Journal

Houston-based Noble Energy Inc. (NYSE: NBL) notified the state of Texas that it will close Houston-based Rosetta Resources Inc.’s (Nasdaq: ROSE) downtown headquarters after the companies’ multibillion-dollar deal closes this summer.

Noble’s acquisition of Rosetta, which was announced in May, is expected to close on July 20, according to a letter sent to the Texas Workforce Commission. The all-stock acquisition is worth $2.1 billion, and Noble is expected to assume Rosetta’s debt, valued at $1.8 billion in May.

Afterward, Rosetta’s headquarters at 1111 Bagby St., Suite 1600, is expected to close on Aug. 31 or within 14 days thereafter, according to the Worker Adjustment and Retraining Notification Act letter.

 

Rosetta Resources Operating LP, which will become a wholly owned indirect subsidiary of Noble, will reduce its workforce after the deal closes. Eleven executives will resign, and 65 other jobs will be cut between Sept. 8 and Sept. 14.

Meanwhile, the remaining 230 employees from Rosetta’s headquarters will be offered continued employment at Noble’s headquarters, at 1001 Noble Energy Way in the former Compaq campus in northwest Houston. Noble expects many of the employees to accept the offer, but those who do not will lose their jobs.

via Noble Energy to close Rosetta Resources HQ after acquisition, cut jobs – Houston Business Journal.