Opportunities for Oil & Gas Service & Supply Companies in Iran

Posted by Mark Young

Jan 28, 2016 6:47:53 AM

The lifting of UN sanctions on Iran could well be a lifeline for companies in the oil and gas service and supply sectors. The oil price collapse has tightened E&P company budgets for development in North America, significantly reducing the potential market for oil and gas service and supply companies to operate in. Companies traditionally focused on North American markets are increasingly being drawn into potentially transferring their skills and expertise overseas, and the developments in Iran could open up a huge amount of new opportunities. Before the sanctions were recently lifted, 2014 data shows Iran’s oil and gas industry was a sleeping giant in terms of its potential global reach.

Iran_Reserves_and_Reserves_Life.jpg

Source: Evaluate Energy, via a Country Analysis subscription

 

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Iran not only had the highest amount of oil and gas reserves out of any country in 2014 according to BP and IEA data, it also had the third highest reserve life of all countries with over 1 billion boe of oil and gas reserves based on 2014 production levels.

The news that the UN sanctions were being lifted was accompanied by the announcement that Iran would be opening up 50 oil and gas development projects to foreign investment, with the Iranian government and the national oil company, NIOC, hoping to garner an initial US$25 billion injection through this venture. The announcement attracted all of the world’s biggest and most significant international oil companies to the table; new projects and development plans in one of the world’s most oil and gas abundant areas could be countless within a very short time scale. Of course, general security in the region is being placed under increasing scrutiny as time goes on, but the sheer size of the untapped resource and the very low cost environment make Iran an incredibly attractive prospect for E&P companies wanting to bolster their portfolios at the best value in these challenging times. Service companies looking to move out of the stricken North American marketplace would be wise to consider the Iranian E&P sector as a potential growth market.

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Canadian Upstream M&A Activity Halves in 2015

Posted by Mark Young

Jan 18, 2016 11:05:08 AM

M&A in the upstream sector of the Canadian oil and gas industry saw a very significant drop off from 2014, according to new analysis from CanOils. In 2015, the total combined value for all deals in Canada reached just over Cdn$21 billion, almost half of the 2014 total of Cdn$41 billion. The collapse in oil price has clearly been a major contributing factor to this. 2015 has been a year that has seen cash-rich companies attempt to buy assets at opportunistic price levels from struggling companies, while the potential targets in these deals are reluctant to sell assets at these new lower prices. This dynamic has created an impasse in many cases between buyers and sellers, hence the fall in M&A activity.

DealsCanada2015Chart1.jpg

Source: CanOils M&A Database (see notes 1 and 2)

While the 2015 total is not the lowest overall total in recent years, the Cdn$21 billion is bolstered heavily by deals costing over Cdn$1 billion. There were four such deals in Canada in 2015 and together they made up 62% of the Cdn$21 billion total. In fact, the biggest deal of the year, the Cdn$6.6 billion offer made by Suncor Energy for its Syncrude partner Canadian Oil Sands Ltd., made up around 31% of the Cdn$21 billion total by itself.

If deals or offers with prices of over Cdn$1 billion are excluded from the chart above and deals with values of under this amount are considered independently, then 2015 did see the lowest activity in the last six years. This is similar to the U.S. shale industry, which saw a six-year low in total deal value in 2015 and only one deal with a value over US$1 billion

Royalty Assets in Vogue

While there was a clear fall in activity in Canadian upstream M&A from 2014 to 2015, there is one asset type that has actually become relatively hot property. Royalty assets have been changing hands frequently and often for large sums since September 2014, when the price collapse began, particularly when compared to similar activity in the 4-5 year period prior to this.  

DealsCanada2015Chart2.jpg

Source: CanOils M&A Database

Selling royalty assets has clearly become a trend in the last eighteen months. The long-term nature of the titles, the lack of short-term risk and the low ongoing costs inherent to royalty assets have all meant that their value has not been as affected by low commodity prices as other asset types; they have served as a prudent strategy to raise capital during the price downturn. Notable royalty deals in 2015 have included Cenovus’ sale of 4.8 million acres for Cdn$3.3 billion in June, Canadian Natural Resources’ sale of its royalty business to PrairieSky Royalty Ltd. for Cdn1.8 billion in November and Penn West Petroleum’s sale of 325,000 acres for Cdn$318 million in April.

Deal Counts Show True Drop in Canadian M&A Activity

The fall in activity between 2015 and 2014 is much clearer if the number of deals announced is considered, rather than value. In fact, 2015 saw the lowest number of deals recorded in any of the six years since 2010. This lack of activity was not confined to any one particular geographic area either, with all three major producing Canadian provinces seeing significant drops in the number of new deals announced during 2015 compared to 2014.

DealsCanada2015Chart3.jpg

Source: CanOils M&A Database (see notes 2 and 3)

Top 10 Deals Announced in Canada in 2015

DealsCanada2015Table1.jpg

Source: CanOils M&A Database (see note 1)

Notes

1) This includes deals that are still in progress but does not include deals that have been cancelled or bids that have been rejected. For any deal that is still in progress or incidences where an offer is still on the table, there is of course no guarantee of completion. In six months’ time, for instance, this chart could look completely different should a raft of deals be eventually cancelled for any reason.

2) A deal is assigned to each year based on its announcement date, unless the announcement was made in a later period to the actual deal taking place. For example, if a deal was announced in 2014, but did not complete until 2015, it would form part of the 2014 deal total. If, however, a deal was announced by a company in 2015, but actually closed in 2014, it would form part of the 2014 deal total.

3) A deal is assigned to a province if the deal involves assets within that province. If a deal involves assets from multiple provinces, it is included in the chart twice so that a province does not lose a deal in any case, even if it is a minor part of the deal in question. For example, if a deal involved assets from both Alberta and Saskatchewan, the count was included in both Alberta and Saskatchewan columns. The chart on the right (by province) is not indicative of the number of deals across the whole of Canada in each year because of this.

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U.S. Shale Sees Lowest M&A Deal Activity for 6 Years in 2015

Posted by Mark Young

Jan 14, 2016 6:52:20 AM

Evaluate Energy’s upstream M&A review for 2015 showed that global deal value was down by 4% on the total seen in 2014, mainly due to the well-publicised price collapse forcing many companies to focus on merely surviving rather than any growth or acquisition strategies. Nowhere was this more apparent than in the U.S. shale industry, where the reported total deal value dropped to a six-year low in 2015 of $12 billion, which is a 76% decline on the total in 2014 of around $50 billion.

USShaleDeals2015graphBlog.jpg

Source: Evaluate Energy M&A Review 2015

The shale industry in North America was strongly cited as one of the chief instigators for the change in policy by OPEC. The surprise emergence of the resource over a decade ago arrested a slowly declining U.S. production rate and ate away at potential market share that OPEC could have satisfied through its spare production capacity. It was envisaged by OPEC that this low-margin production method would be hit the hardest by a lower oil price and would contribute to a re-balancing of the industry. However, though it has dropped, shale oil and gas production in North America has not been hit as hard by the price downturn as some expected. M&A activity within the shale industry stands in stark contrast to production and has not displayed anywhere near the same durability or resilience.

There was also only one shale deal over $1 billion in 2015, with Noble Energy acquiring Rosetta Resources for $3.8 billion. Before the deal was announced in May, Rosetta’s debt to equity level already stood at a high rate of 137.1% in Q1 2015, which would have inevitably risen as the year played out. Despite this, Noble Energy was keen to gain Rosetta’s assets in the Eagle Ford shale play and Permian basin while they were still at a historically low price. Production during the year from the Eagle Ford play and the Permian basin have proven to be relatively robust compared to other areas of the United States, which highlights the comparative advantage in netbacks in these areas. This advantage has also been seen through M&A activity this year. M&A spends in the Permian basin and Eagle Ford dropped by 49% and 44% respectively from 2014 to 2015, which are both significant, but far less than the 85% fall in the Bakken play, due to its higher break-even cost of production. Companies have been struggling with significantly falling netbacks in the Bakken all year.

Top 10 Shale Deals in the United States in 2015

USShaleDealsTable2015.jpg

Source: Evaluate Energy M&A and Deal Analytics Database

All data in this report was sourced from the Evaluate Energy M&A and Deal Analytics database, and this report forms part of Evaluate Energy's Global M&A Review for 2015, which provides detailed analysis of 2015's $163 billion of upstream deals, focusing on the most significant deals and M&A trends of the year.

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Global Upstream Oil & Gas M&A Reaches $163 Billion in 2015

Posted by Eoin Coyne

Jan 11, 2016 6:22:51 AM

Despite a tumultuous year where a challenging oil price instigated a mass cull of investment in the industry, the overall M&A spend in the upstream sector still reached a credible $163 billion during 2015, according to Evaluate Energy’s Annual M&A Review for 2015, which is available for download now.

MAGraphAnnual2015.jpg

Source: Evaluate Energy M&A Review of 2015

2015 marked the first full year since Saudi Arabia ramped up production and allowed free market forces to dictate the price of oil. The oil price as per the WTI benchmark subsequently traded between $34.55 and $61.36 during 2015, averaged at $48.79 and ended the year at $36.36.

This $163 billion figure represents only a 4% drop on the total recorded by Evaluate Energy during 2014 and a 10% increase on the 2013 total, which, on the face of it, does not seem too significant of an upheaval following the crash in prices. However, a great deal of this $163 billion is represented by Royal Dutch Shell’s $84 billion takeover for BG Group that was agreed in the second quarter. So, while production actually went against many predictions and did not fall dramatically following 2014’s price collapse, the upstream M&A market did falter, with many unfortunate, highly-leveraged companies being forced to focus on survival rather than M&A or expansion strategies.

For a full, in-depth review of 2015’s M&A activity in the upstream oil and gas sector, download the full M&A review from Evaluate Energy at this link.

Inside the Evaluate Energy M&A Review of 2015:

  • Why 2015 saw a series of high-profile corporate takeover bids rejected
  • The extent to which deal activity actually dropped in 2015 after the price collapse
  • How U.S. shale M&A activity fell to its lowest level since 2009
  • Expectations for 2016 in the upstream oil and gas M&A arena

MAReportCover2015.jpg

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Canadian Oil & Gas Companies in Colombia

Posted by Mark Young

Dec 16, 2015 7:17:37 AM

Gran Tierra Energy Inc. (TSX:GTE) recently agreed a US$84 million deal to acquire Petroamerica Oil Corp. (TSX-V:PTA), a deal which will expand Gran Tierra’s position in the Llanos and Putumayo basins of Colombia. Analysis of M&A deal history in CanOils’ latest report “Canadian Upstream M&A Reaches Cdn$2.7 Billion in November 2015” shows that these basins have proven to be popular acquisition targets for Canadian oil and gas companies over the past few years. No fewer than nine TSX and TSX-V listed companies have made an acquisition in these basins since 2012:

  • Canacol Energy Ltd. (TSX:CNE)
  • Gran Tierra Energy Inc. (TSX:GTE)
  • Pacific Exploration & Production Corp. (TSX:PRE)
  • Parex Resources Inc. (TSX:PXT)
  • Petroamerica Oil Corp. (TSX-V:PTA)
  • Petrominerales Ltd. (Formerly TSX:PMG, see note 1)
  • Platino Energy Corp. (Formerly TSX-V:PZE, see note 1)
  • Santa Maria Petroleum Inc. (TSX-V:SMQ.H)
  • Suroco Energy Inc. (Formerly TSX-V:SRN, see note 1)

The most active company in terms of spending has been Pacific Exploration & Production Corporation, spending a total of just over Cdn$2.25 billion between 2012 and 2014. This includes the Cdn$1.58 billion acquisition of Petrominerales Ltd. in 2013. The other eight companies’ deals combined for a total reported value of around Cdn$570 million between 2012 and 2015.

Parex Resources Inc. has been the most active company in terms of number of acquisitions announced, having agreed 10 separate deals in the four year period.

Canada_Colombia_Graph_1.jpg

Source: CanOils M&A Database via "Canadian Upstream M&A Reaches Cdn$2.7 Billion in November 2015"

Canada_Colombia_Graph_2.jpg

Source: CanOils M&A Database via "Canadian Upstream M&A Reaches Cdn$2.7 Billion in November 2015"

UPDATE TO ARTICLE: 14th January, 2016 - Gran Tierra Energy signed another deal to consolidate its interest in the Putumayo basin block PUT-7 for US$19 milion. This comes a day after news that the company's acquisition of Petroamerica Oil Corp. completed.

Canada_Colombia_CTA.jpg

Notes:

1) The following companies in the list of nine companies are no longer active, but were listed on the TSX or TSX-V at the time of their respective acquisitions being made:

  • Petrominerales Ltd. was acquired by Pacific Exploration and Production Corp. (then known as Pacfic Rubiales Energy Corp.) in 2013 
  • Platino Energy Corp. was acquired by Denham Capital Management LP in 2015
  • Suroco Energy was acquired by Petroamerica Oil Corp. in 2014

Insights from CanOils’ M&A database, as well as data from CanOils’ Assets, Financings, Financial & Operating and Oilsands databases, help to provide a thorough, independent overview of the month’s most significant deals in the Canadian oil and gas industry in this report. Sign up to the CanOils & Evaluate Energy Mailing List here and be informed as soon as new analysis reports like this are available.

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The Top 100 Canadian Oil & Gas Companies

Posted by Mark Young

Dec 9, 2015 11:05:18 AM

CanOils is pleased to announce the release of its new report, Canada's Top 100 Oil & Gas Companies, which has been compiled using Q3 2015 Canadian oil & gas production results from all TSX and TSX-V listed Canadian oil and gas companies in the CanOils database.

Sign up to the CanOils & Evaluate Energy Mailing List here and be informed as soon as new analysis reports like this are available

Completion of Maintenance Work Has Huge Impact on Rankings

The majority of climbing or falling in this quarter’s rankings was due to many companies seeing planned or unplanned maintenance work that blighted their production in Q2 come to an end. This meant they moved towards levels they had previously been producing at, recovering to what could arguably be described as their true place in the rankings. Canadian Oil Sands Ltd. – a company that is currently the subject of a takeover bid from Canada’s 2nd biggest producer, Suncor Energy Inc. – rose by 3 places into 12th position in the rankings after planned Syncrude turnarounds cost the company a significant amount of bitumen production Q2, while fellow oilsands operator MEG Energy also climbed this period (5 places to 13th position) after its own planned (albeit extended due to forest fires) Q2 maintenance came to an end. 

Many companies fell in the rankings despite stable production levels between Q2 and Q3, due to other companies recording large increases in production of their own. The highest ranked company to fall into this category was Pengrowth Energy Corp., which suffered a 2 place drop to 18th because of the recoveries by Canadian Oil Sands and MEG, while Niko Resources Inc. (down 3 places to 38th), Crew Energy Inc. (3 places to 39th), Twin Butte Energy Ltd. (2 places to 40th) and PrarieSky Royalty Ltd. (2 places to 41st) were among the other notable companies that fell for similar reasons. The other common reason for companies moving up the rankings this period was acquisitions that completed in the quarter.

Overall Statistics

The biggest climbers in the rankings this period were Sterling Resources Ltd. and PetroShale Inc.; both companies recorded a 12 place rise in the rankings to 67th and 95th positions, respectively. Sterling saw the resumption of previously curtailed production in the UK North Sea increase its production by 24% in Q3 over Q2, while PetroShale acquired new wells in the North Dakota Bakken and recorded a 34% increase in production of its own. Granite Oil Corp. suffered the most significant fall this quarter, a drop of 17 places into 80th position, but did not specify the reason why its production fell 47% compared with the previous quarter other than blaming natural decline and a lack of new wells being drilled.

Top100StatisticTableSept15.jpg

Source: CanOils, via Canada's Top 100 Oil & Gas Companies, September 2015

Download the complete report on Canada’s Top 100 Oil & Gas Companies from CanOils here, for free, now.

Top100-7Cover.jpg

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The CanOils database provides clients with efficient data solutions to oil and gas company analysis, with 10+ years financial and operating data for over 300 Canadian oil and gas companies, M&A deals, Financings, Company Forecasts and Guidance, as well as an industry leading oil sands product. Join our mailing list to receive more content and marketing materials from us when we have more data and analysis to share with you.

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Upstream Oil & Gas M&A in Canada Reaches Cdn$2.7bn in November 2015

Posted by Mark Young

Dec 8, 2015 7:41:21 AM

Analysis in CanOils’ new report “Canadian Upstream M&A Reaches Cdn$2.7 Billion in November 2015” shows that the total value of upstream deals in Canada was over Cdn$1 billion for the second month in a row, after a slow period between July and September.

CanOils_MA_Report_Nov2015_1.jpg

Source: CanOils M&A Database. Note: Excludes international deals involving Canadian companies. Sign up to the CanOils & Evaluate Energy Mailing List here and be informed as soon as new analysis reports like this are available.

The vast majority of this total emanated from the month’s biggest deal, which was a continuation on the trend of Canadian majors divesting royalty properties for values seemingly unperturbed by the slump in oil prices; PrairieSky Royalty Ltd. acquired certain Canadian Natural Resources Ltd. (“CNRL”) royalty assets for Cdn$1.8 billion. Elsewhere, the rumours of Pine Cliff Energy Ltd. acquiring a portion of ConocoPhillips’ listing of 35,000 boe/d of Canadian production proved to be true with an announcement during the month of a Cdn$185 million purchase.

It was also a busy month for Canadian companies operating outside of Canada. Gran Tierra Energy Inc. became the latest Canadian-listed company to strike a deal in the Llanos and Putumayo basins of Colombia as it agreed to acquire Petroamerica Oil Corp. for around Cdn$110 million. There were also significant deals for Canadian-listed companies in the U.S., Europe and Africa this month.

CanOils_MA_Report_Nov2015_3.jpg

Source: CanOils M&A Database. Note: Excludes international deals involving Canadian companies. Sign up to the CanOils & Evaluate Energy Mailing List here and be informed as soon as new analysis reports like this are available.

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MACoverNov15.jpg

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Insights from CanOils’ M&A database, as well as data from CanOils’ Assets, Financings, Financial & Operating and Oilsands databases, help to provide a thorough, independent overview of the month’s most significant deals in the Canadian oil and gas industry in this report. Sign up to the CanOils & Evaluate Energy Mailing List here and be informed as soon as new analysis reports like this are available.

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Assets for Sale in Western Canada

Posted by Mark Young

Nov 18, 2015 7:04:04 AM

New Assets for Sale Product Now Live on CanOils

The power of both the CanOils Assets and CanOils M&A Databases has been greatly enhanced with CanOils’ newest product, Assets for Sale.

This latest expansion, which is available to all CanOils subscribers, provides details on all publicly available listings of assets for sale in Alberta, British Columbia, Manitoba and Saskatchewan. The database is updated intra-daily with new assets as soon as they are put up for sale.

At a time when falling commodity prices are causing many struggling Canadian companies to put plenty of assets up for sale, this new Assets for Sale product is a vital addition to your suite of data analysis tools to keep on top of every development in the Canadian oil and gas industry.

Map of all Assets for Sale in Western Canada as of November 16, 2015

AssetsforSaleAnnouncement1.jpg

Source: CanOils Assets, click here for map legend

Sign up to the CanOils & Evaluate Energy Mailing List here and be informed as soon as new analysis reports like this are available.

CanOils will also be giving a full rundown of all assets put up for sale each month in its Canadian M&A Monthly Reviews, the latest of which (October 2015) can be downloaded here.

CanOilsMAMonthly2CTA344.jpg

To receive future releases of this report, please click here

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Key Benefits of the Assets for Sale Expansion to CanOils Subscribers

1. Full Coverage of Western Canada

Sourced from a multitude of brokers, advisors and company websites, CanOils Assets for Sale holds full details on all listings for producing assets, developed and undeveloped land holdings as well as royalty assets in Alberta, British Columbia, Manitoba and Saskatchewan.

From the CanOils Assets Webmap, the full details for any listed asset, including production, acreage, reserves and NPV, can be found through a direct link back to the CanOils Assets for Sale database.

Example of an Asset for Sale Listing in CanOils

AssetsforSaleAnnouncement2.jpg

2. Complete Coverage of Canadian M&A Activity in the Upstream Sector

CanOils has provided full and comprehensive coverage of transactions in the Canadian upstream M&A market since 2008. Now, with the addition of Assets for Sale, the M&A Database is expanded to include a forward looking element to accompany the thousands of upstream M&A deals already available to CanOils M&A subscribers. All CanOils M&A subscribers have access to both the Assets for Sale data on the CanOils Assets Webmap and the Assets for Sale listings in CanOils.

As soon as a new listing is made public, CanOils M&A subscribers can quickly use the plethora of data on offer in the CanOils M&A database to get a clearer picture of what the future holds for the assets in question. CanOils M&A will be able to help predict a potential sales price for the assets, looking at per barrel metrics of past deals of similar production, formation or geographic location, and maybe even help to identify a potential buyer, looking at past deal trends for companies that have been active in the M&A market in recent years for similar assets to the assets being sold. For more on the CanOils M&A database, download our brochure.

3. Analyse Well Performance in Areas Close to Assets that are Up for Sale

(Note: Full analysis only available to CanOils Assets subscribers)

Once you have identified an available listing that may be of interest, the power of CanOils Assets allows you to analyse every well surrounding it to see if the asset for sale is located in an area with successfully producing wells or wells with high IP rates.

AssetsforSaleAnnouncement3.jpg

Source: CanOils Assets, click here for map legend

This asset for sale, for example, produces 70% gas, but is located in an area with many oil and gas wells. Using the identify tools on the CanOils Assets Webmap, the historic production for all of wells of a similar production mix in the area can be taken into Excel in a matter of moments for in-depth analysis.

4. Identify the Companies that Own Land Close to Assets that are Up for Sale

(Note: Full analysis only available to CanOils Assets subscribers)

Using CanOils Assets’ new land analysis tools, it is possible to identify the major players surrounding any asset for sale in terms of how much land is owned by each company. This is important for many reasons. For example, it could help identify a likely or potential buyer for the assets or help to analyse the success of the area if the asset is surrounded by operators with a long history of strong operational performances.

AssetsforSaleAnnouncement4.jpg

Source: CanOils Assets. Find out more about the Land Analysis now available to CanOils Assets subscribers.

For more on CanOils Assets and the new Assets for Sale product, take a test drive of CanOils.

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Canadian Oil & Gas Companies Struggle in Q3 2015

Posted by Mark Young

Nov 12, 2015 8:52:48 AM

Canadian oil and gas companies have recorded major losses as a group for the 3 month period ending September 30, 2015, according to new analysis of quarterly data by CanOils. Low commodity prices have continued to have a huge impact on income statements for oil and gas companies since the end of 2014, with margins being squeezed and huge impairments being recorded across the board. This analysis from CanOils shows that Canadian companies are feeling the same effects as their counterparts across the border in the U.S., whose earnings were analysed using Evaluate Energy data recently.

In this report, CanOils has used Q3 2015 data from the income statements of 34 TSX and TSX-V companies (“the group”) that produce mainly in Canada and have production between 5,000 boe/d and 200,000 boe/d. The full list of companies is available here. In total, these companies produced 1.29 million boe/d in Q3 2015.

The losses for these companies were far greater this quarter compared to previous periods. In Q2 2015, the group made a combined net loss of Cdn$596.5 million but, three months on, this had slumped to a staggering Cdn$3.64 billion loss.

TSX Earnings Q3 2015 1

Source: CanOils, see note 1. Sign up to the CanOils & Evaluate Energy Mailing List here and be informed as soon as new analysis reports like this are available.

The big reason for the steep drops in Q4 2013, Q4 2014 and Q3 2015 is that this is when the companies recorded impairments – Canadian-listed companies are required by IFRS to assess their assets for impairments either once per year at year-end or following the discovery of an indicator of impairment. Only a handful of the group of companies recorded any impairment outside of these three quarters.

So far in 2015, impairments for the group have hit Cdn$4.57 billion, which is a higher total than in any of the last four years. 2015’s total represents a 14% increase over 2014’s annual total of Cdn$4.03 billion (which was also likely caused by the collapse in global commodity prices) and almost double the 2013 total of Cdn$2.32 billion. 23 companies out of the 34 companies have recorded impairments in 2015, compared with only 18 in 2014.

TSX Impairments 2012 - 2015

Source: CanOils, see note 2. Sign up to the CanOils & Evaluate Energy Mailing List here and be informed as soon as new analysis reports like this are available.

On an individual company basis, the biggest asset impairments of 2015 to date have been recorded by Penn West Petroleum Ltd. (TSX:PWT), with a total of Cdn$834 million. Penn West’s impairments relate to its properties that are being sold in the Weyburn area of southeast Saskatchewan and the Mitsue area of central Alberta as well as certain non-core properties in the Fort St. John area of northeastern British Columbia and in the Swan Hills and Wainwright areas of Alberta.

The company has been pressing on with major asset sale plans over the past few months, along with another of the companies to have recorded 2015’s biggest impairments, Pengrowth Energy Corporation (TSX:PGF). Pengrowth has recorded Cdn$409 million of asset impairments in 2015 (see note 3) so far and put assets producing 13,000 boe/d up for sale in October, as it tries to reach its 2015 divestiture target of Cdn$600 million by year end to help reduce its debt. The most recently agreed and planned sales of assets by both Penn West and Pengrowth are analysed in detail in CanOils’ new report, “Canadian Upstream M&A Heats Up in October 2015.”

Top Impairments TSX 2015 to Date

Source: CanOils, see note 2. Sign up to the CanOils & Evaluate Energy Mailing List here and be informed as soon as new analysis reports like this are available.

All data in this report was created using the CanOils database, which holds over 10 years of oil and gas financial and operating data for TSX and TSX-V listed companies. CanOils also now has a comprehensive wells and land database covering all of Western Canada, CanOils Assets, which has just gone through a major upgrade process, find out more here.

Notes

1) Net income/Loss here refers to post-tax net earnings on the 34 companies’ income statements; the figures have not been adjusted for non-recurring items such as impairments, gains or losses on asset sales or unrealised gains or losses on hedging contracts.

2) Impairments are taken from the income statement of each company and refer to impairments of assets, i.e. property and equipment, only. Impairments related to financial assets, investments or goodwill are not included.

3) Pengrowth also recorded a goodwill impairment of Cdn$73 million in Q3 2015, which is not included in the Cdn$409 million total mentioned here.

4) The 34 companies were chosen as they had all reported preliminary results by the morning of November 12, 2015 (UK time) and were all domestic, non-oilsands Canadian producers with production between 5,000 boe/d and 200,000 boe/d. The full list is available here.

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Canadian Oil & Gas Upstream M&A Activity Heats Up in October 2015

Posted by Mark Young

Nov 10, 2015 3:52:43 AM

Analysis in CanOils’ new report “Canadian M&A Activity Heats Up in October 2015” shows that Canadian oil and gas upstream sector had Cdn$7.3 billion of M&A deals announced during October 2015. The bulk of this value is made up of Suncor’s Cdn$6.6 billion takeover bid for Canadian Oil Sands Limited, which was featured in September’s M&A review from CanOils. Even if the Suncor bid had not been made, the remaining monthly total of around Cdn$748 million would still be the highest monthly total since June 2015.

Oil & Gas Deals - Canada 2015

Source: CanOils M&A Database. Note: Excludes international deals involving Canadian companies. Sign up to the CanOils & Evaluate Energy Mailing List here and be informed as soon as new analysis reports like this are available.

The vast majority of this Cdn$748 million total was composed of PKN Orlen making an offer to acquire Kicking Horse Energy, and both Penn West and Pengrowth divesting non-core assets to meet their respective disposition targets. There were also a few important sales by Canadian companies overseas, including Encana exiting the D.J. Basin in the U.S. and Mart Resources finding a buyer in the form of a local Nigerian company.

These deals display an increase in Canadian oil and gas upstream M&A activity and form the main focus of this month’s M&A review, which also includes a detailed look at all of the main M&A stories for Canadian companies both in Canada and abroad. The report also provides a rundown of all assets that were put up for sale in October, including a look into the assets being made available by Cequence Energy’s decision to begin evaluating strategic alternatives.

Top 5 Deals in Canada in October 2015

Oil & Gas Deals - Canada Oct 2015

Source: CanOils M&A Database. Note: Excludes international deals involving Canadian companies. Sign up to the CanOils & Evaluate Energy Mailing List here and be informed as soon as new analysis reports like this are available.

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Insights from CanOils’ M&A database, as well as data from CanOils’ Assets, Financings, Financial & Operating and Oilsands databases, help to provide a thorough, independent overview of the month’s biggest deals in the Canadian oil and gas industry in this report. Sign up to the CanOils & Evaluate Energy Mailing List here and be informed as soon as new analysis reports like this are available.

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