IHS: Global upstream M&A activity rebounded in 2Q

Global upstream mergers and acquisitions (M&A) deals nearly doubled in the second quarter, up from a 10-year low in the first quarter, spurred by a resurgence in oil prices and a thaw in equity and credit markets, according to IHS Herold Inc., an IHS company.

July 21, 2009

2 min read

By OGJ editors
HOUSTON, July 21 -- Global upstream mergers and acquisitions (M&A) deals nearly doubled in the second quarter, up from a 10-year low in the first quarter, spurred by a resurgence in oil prices and a thaw in equity and credit markets, according to IHS Herold Inc., an IHS company.

“Both US onshore and international deal counts increased significantly, although North American activity remained well below historical averages,” said Chris Sheehan, IHS Herold director of M&A research. “International pricing for proved plus probable reserves held firm on stronger crude oil prices, but falling gas prices plunged North American asset deal prices to the lowest level since 2005.”

Sheehan said, “The upsurge in activity in the second quarter is encouraging, but the market is still extremely volatile.”

IHS Herold reported that second quarter total transaction value increased fourfold outside North America, driven by strong activity in the Africa-Middle East region and upturns in Europe and Asia-Pacific.

Total worldwide transaction value was flat at $28.4 billion, as first quarter figures were buttressed by the $20 billion merger of Suncor Inc. and Petro-Canada. National oil companies represented nearly 40% of global deal value, including Sinopec’s $8.8 billion agreement to acquire Addax Petroleum—the largest overseas upstream transaction by a Chinese company.