2005 Global Upstream M&A Deal Value More Than Doubles to $160 Billion, Says John S. Herold/Harrison Lovegrove Review.HOUSTON -- Global M&A upstream transaction value in 2005 reached levels not seen since the era of the mega-mergers of the late 1990s, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the 2006 Global Upstream M&A Review prepared by John S. Herold, Inc. and Harrison Lovegrove & Co., Ltd. This review provides a comprehensive analysis of more than 290 significant upstream transactions valued at $160 billion. In a joint letter, Arthur Smith Arthur Smith is a name shared by several people:
Key Conclusions of the Review Are: Corporate Consolidation Returns Expenditures on corporate acquisitions more than tripled to $120 billion, as corporate deal count rose 40% year-over-year, headlined by the ConocoPhillips-Burlington and Chevron-Unocal mergers. The value of asset transactions also continued to steadily increase, a trend which has now been evident for five years. Multi-Region/Outside North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. Deals Fuel Value Surge North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. transaction value increased 30% to $48.4 billion, but only represented 30% of total global transaction value, down from 56% in 2004 and the five year average of 38%. The takeover of significant companies with international portfolios, ("multi-region transactions") totaled $68.4 billion, or 43% of total worldwide transaction value after several low-volume years. Total value for other transactions outside of North America reached $42.8 billion, a 54% increase over 2004. Deal Pricing Hit Record Highs Global proved reserve costs tripled to $9.60 per barrel of oil equivalent The barrel of oil equivalent (bboe, sometimes BOE) is a unit of energy based on the approximate energy released by burning one barrel of crude oil. The US Internal Revenue Service defines it as equal to 5.8 × 106 BTU [1]. 5. (boe), up from $3.16 per boe in 2004. Outside North America, proved reserve values soared more than 400% to $8.10 per boe, while North American proved reserve values increased 55% to a record $14.62/boe. Buyers appeared to loosen their valuation criteria and regional focus due to competitive pressures and, primarily, strong commodity prices. The historical lag of implied costs to commodity prices has disappeared as even proved plus probable (2P) values skyrocketed. Canadian and European Implied Values Are the Highest Canada was the most expensive M&A region, with 30% of deals transacted at a proved reserve value of over $30 per boe. Mature North Sea properties also commanded premium prices. North American transactions were spurred by heavy activity by international players in two key plays, the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east and Canadian oil sands. International oil companies have been less willing to acquire large resource volumes despite lower costs in Africa, South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , and Asia because of political risk and access issues. NOCs Push into International M&A The rise of NOCs in global upstream M&A has added significantly to the market competition. NOC (Network Operations Center) A central or regional location for monitoring a large network. Also called a "network management center" (NMC), "service management center" (SMC) or "network control center" (NCC), a NOC may be used to manage a large enterprise network, international M&A transaction value rose threefold in 2005, with Chinese NOCs particularly active, despite their failure to land Unocal. Domestic consolidation of Russian firms significantly added to overall NOC spending. Deals for Unconventional Resources in the Spotlight Canada oil sands attracted heavy international attention as key 2005 deals involving undeveloped 3P reserves transacted at implied values 40% higher than producing 1P reserves were bringing just two years ago. Coalbed methane Coalbed methane is a form of natural gas extracted from coal beds. In recent decades it has become an important source of energy in United States, Canada, and other countries. transactions expanded outside of the U.S., while M&A investment in tight gas plays such as the U.S. Barnett Shale The Barnett Shale is a geological formation of economic significance. It consists of sedimentary rocks of Mississippian age in the U.S. State of Texas. The formation is estimated to stretch from the city of Dallas to west of the city of Fort Worth and south, covering 5,000 square continued to rise. 2006 Implied Values Remain Elevated North American proved reserve values continued to accelerate, reaching over $18/boe in the 1Q 2006. The absence of significant corporate transactions has limited total transaction value but deal expenditure is still ahead of this time last year. For more information about the 2006 Global Upstream M&A Review, please contact Christopher Sheehan of John S. Herold, Inc. at (203) 847-3344 or Michael Bridden of Harrison Lovegrove at (713) 877-9588 or +44 207 632 1500. Founded in 1948, John S. Herold, Inc. is a specialized research and consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a focusing on valuation, strategy, and performance measurement of the world's leading oil and gas companies. Herold closely monitors the world's energy capital markets and the dynamic merger, acquisition, and divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). market for energy assets. Harrison Lovegrove & Co., Limited is a global oil and gas corporate advisory firm. It has a well recognized group of professionals who are focused on advising upstream oil and gas companies in developing their businesses through acquisitions, divestitures, swaps of assets and subsidiaries, and the takeover and defense of listed companies. Copyright (C) 2006 John S. Herold, Inc. ("JSH JSH JASA Standards Handbook JSH Java Station Handler "). All rights reserved. Herold Press Release is published by John S. Herold, Inc., 14 Westport Avenue, Norwalk, CT 06851, USA. The information contained herein has been obtained from sources believed to be reliable, but JSH does not guarantee their accuracy or completeness. No information or opinions contained herein constitutes a representation or solicitation for the purchase of any securities of the companies mentioned herein. From time to time, JSH and/or its officers and employees may have long or short positions in the securities mentioned herein or during the past year may have transacted in securities of the companies mentioned. |
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