Preliminary data on U.S. upstream acquisitions for 1998 reveal a record activity level for the second year in a row, says Randall & Dewey Inc., Houston.
In a report released before the merger plans of Exxon Corp.-Mobil Corp. and Total-Petrofina SA were announced, Randall & Dewey said it was expecting 1998 transaction volumes to double the adjusted 1997 volume of $23.9 billion, due in large part to the BP-Amoco deal (OGJ, Aug. 17, 1998, p. 34).
But, given the Exxon-Mobil and Total-Petrofina mergers, among others, the yearend total will reveal an even greater year-to-year increase.
Deals announced in third quarter 1998 brought the 9-month total to $37.7 billion, said Randall & Dewey. Of that amount, $30.2 billion was attributable to the BP-Amoco deal.
In the first 9 months of 1998, 255 transactions were announced. Of these, deals involving 3.5 billion boe of reserves were worth a total of $23.2 billion and yielded an average acquisition cost of $6.60/boe, including the U.S. portion of the BP-Amoco deal.
The trend toward larger deals continued in the third quarter and skyrocketed in the fourth quarter with the Exxon-Mobil and Total-Fina announcements (OGJ, Dec. 7, 1998, p. 37).
In the third quarter, there were 11 transactions worth more than $100 million.
The 9-month total for these larger transactions was 24. Those 24 deals-about 10% of the transactions an- nounced for the period-were worth 93% of the combined 9-month total.
Among the largest deals were the $30.2 billion BP-Amoco merger (U.S. assets only) and a trade between Mobil and Vastar Resources Inc. valued at $470 million. Costilla Energy Inc. also acquired $410 million worth of properties from Pioneer Natural Resources Co.
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