PwC: US shale deal activity jumps in second quarter

Oct. 17, 2014
Merger and acquisition activity in the US oil and gas industry jumped in the second quarter of 2014, and nearly half of total deal value was related to shale plays, according to the Energy Practice of PwC.

Merger and acquisition activity in the US oil and gas industry jumped in the second quarter of 2014, and nearly half of total deal value was related to shale plays, according to the Energy Practice of PwC.

"The first 3 months of 2014 set the stage for the strongest second quarter of oil and gas deal activity that we've seen in the last 5 years," said Doug Meier, deals leader for PwC's US energy practice.

Fifty-four oil and gas deals worth a combined $42.2 billion were announced, up from 47 deals valued at $30.3 billion in the same period of 2013, and 47 deals worth a combined $18.3 billion in the first 3 months of the year.

PwC's Oil & Gas M&A analysis looked at deals valued at more than $50 million using transaction data compiled by IHS Herold.

The report found 21 shale-related deals worth a combined $20 billion were announced in the second quarter, accounting for 47% of total deal value. Overall shale deal value was up from $4.4 billion in the first quarter and $7.7 billion in the year-earlier period.

In the upstream business, shale deals represented 17 transactions and accounted for $11 billion, or 51% of total upstream deal value.

In the midstream industry, four shale-related deals worth $9 billion were announced, compared with two deals worth $210 million in the first 3 months of the year.

"The continued interest in shale plays is a testament to how companies and investors view the success of the unconventional landscape, especially as new technologies and methods come to fruition that increase speed and efficiency from the upstream and drilling process to transportation and bringing oil and gas to market," said John Brady, a partner with PwC's energy practice.

The Eagle Ford was the most active area of shale play deal activity, with six announced deals worth $6.9 billion. The Niobrara shale and Permian basin tied for second place, with three deals each representing $432 million and $1.1 billion, respectively.

Two deals worth $2.9 billion were signed in the Marcellus shale, and the Utica and Bakken shales generated one deal each.