Upstream M&A value down in 2008

March 13, 2009

Global upstream oil and gas mergers and acquisition (M&A) value went down to $104 billion in 2008 from an average around $160 billion from 2005-2007, says IHS Herold Inc. in its "2009 Global Upstream M&A Review."

Offshore staff

NORWALK, Connecticut --Global upstream oil and gas mergers and acquisition (M&A) value went down to $104 billion in 2008 from an average around $160 billion from 2005-2007, says IHS Herold Inc. in its "2009 Global Upstream M&A Review."

The study says the record pace during the first half of 2008 which saw 203 transactions announced by July 31 dropped to 79 in the final five months of the year. November and December set a record low with 25 deals.

The average boe value for calendar 2008 was up for the year from $10.01 in 2007 to $11.51. On the other hand the corporate transaction value went to a five-year low at $34.2 billion. It was $64.2 billion in 2007 and $120.2 billion in 2005. The number of corporate deals also was a five-year low, with no transactions in the US in 4Q 2008.

Looking ahead, the report says the M&A market looks ripe for consolidation in 2009. Looking beyond 2009, the study expects the number of assets coming onto the market to increase, but the buyer universe to be smaller.

03/13/2009