Bakken second most active market for deals in Q3

By Luke Geiver | October 16, 2013

After a slow start to 2013, the global oil and gas industry is once again tracking normal upstream deal levels. According to PLS Inc., a Houston-based research, transaction and advisory firm, global upstream oil and gas activity for the third quarter of 2013 totaled roughly $41.8 billion. The Q3 levels are down 19 percent from the same period in 2012 when totals reached $51.3 billion, but up 59 percent from the second quarter of 2013 when totals equaled $26.4 billion.

According to PLS, the increase in deals in Q3 is a result of several factors including high deal inventory levels along with a healthy buying interest from private equity firms. Sellers are motivated to divest conventional legacy producing assets as well as sell down interest in large world-class global discoveries. “The capital raised from these transactions will be used to help fund increasing capital plans including, but not limited to, North America’s resource plays,” PLS said.

During Q3, PLS reported high activity in U.S. onshore resource plays. Outside of the Gulf of Mexico, the most active region was the Bakken. “Since May 2007, there have been 249 deals totaling $24 billion, with 14 deals for $2 billion in Q3,” PLS said. According to PLS, the largest deal was Oasis Petroleum’s $1.45 billion buy from privately held Roda Drilling and Zenoco Inc. The company also performed three other Bakken buys for another $65 million. After the Bakken, the next most active region in the U.S. is the Eagle Ford Shale of Texas.

According to Brad Lidsky, PLS managing director, “This year, the oil and gas deal market started slow after an unusually busy Q4 2012 which saw 238 deals for $138 billion,” adding that, “Furthermore, looking forward we expect the final quarter of 2013 to trend above average for deal activity.”