Q1 2011 Oil and Gas Mamp;A Hits $45 Billion: Shale Resources Dominate amp; BP signals Portfolio Shift

Oil and gas deals in the Eamp;P sector reached $73 billion in the 4th quarter of 2010 with deals for the year totalling $238 billion, compared with $151 billion in 2009. The total deal value in the last quarter of this year is second only to Q3 2010 in recent years, even outscoring Q4 2009 - a quarter that included ExxonMobil’s $41 billion acquisition of XTO Energy.

As the dust settles on an active year for mergers and acquisitions in the global Oil and Gas Eamp;P sector, Evaluate Energy looks forward to what kind of Oil amp; Gas Mamp;A trends may develop in the sector during 2011: With only a modest growth in gas prices predicted, gas weighted assets are likely continue to change hands in the US at large discounts to equivalent liquids assets during 2011.  Smaller gas focused companies in the US may have to consolidate or risk being acquired by their larger peers who can afford to take a longer view on gas price projections  Shale plays in Europe may sta

Woodside Petroleum Ltd.’s purchase of a stake in Israel’s largest natural gas deposit takes Asia-Pacific oil and gas acquisitions to a record US$99-billion this year, tying the U.S. for the first time. Australia’s second-largest petroleum producer yesterday said it will pay partners including Noble Energy Inc. an initial US$696-million and as much as US$2.3-billion for part of the Leviathan field. Deals by U.S. energy companies have fallen 35% to US$98.7-billion in 2012, while Asia-Pacific purchases increased 3.8%, according to data compiled by Bloomberg.

Evaluate Energy submits:Oil and gas deals in the E&P sector reached $73 billion in the 4th quarter of 2010 with deals for the year totalling $238 billion, compared with $151 billion in 2009. The total deal value in the last quarter of this year is second only to Q3 2010 in recent years, even outscoring Q4 2009 - a quarter that included ExxonMobil’s (XOM) $41 billion acquisition of XTO Energy.

Oh Sung-Hwan, director of Global Energy Cooperation Center at the Ministry of Foreign Affairs in South Korea, expects Korean companies to invest heavily in natural gas assets to ensure supply security. Excerpts from the interview:

The rush to export liquefied natural gas from North American shores will help drive asset deals, mergers and acquisitions in 2013, part of a wave of global consolidation led by cash-flush national oil companies that could see several Canadian companies taken out. Watch for “bigger and bolder” moves by state-run behemoths this year, “as the share of oil and gas consumption by Asian countries continues to rise and pressure on Asian NOCs to ‘go global’ increases,” said Neil Beveridge, a senior analyst at Sanford C. Bernstein in Hong Kong.

China will almost certainly fail to meet its target of producing 6.5 billion cubic metres of shale gas per year by 2015. Even so, there can be no doubt it is set to become one of the world’s largest shale gas producers over the next decade.

Japan’s presence in the Canadian shale sector increased this week with Tokyo Gas, Osaka Gas, Chubu Electric and JOGMEC all joining Mitsubishi in their Horn River shale joint venture with Penn West Energy.  The move coincided with a report from the BC Ministry of Energy and Mines that put an estimate of potential resources in the play at 61–97 TCF of gas with a mid-case estimate of 78 TCF. The new entrants will join existing Asian Pacific companies PetroChina, Mitsubishi and Korea Gas Corp in the sector.