In 2012 oil and gas companies completed 1,600 M&A transactions with an aggregate value of $400 billion. Deals involved mainly upstream assets. The sector has seen continued activity despite the economic downturn. This is an industry which continues to be acquisitive.
Activity is not undertaken exclusively by oil majors. A feature of the industry has always been its variety of participants, ranging from integrated energy conglomerates to entrepreneurial frontier explorers. New entrants include increasingly expansionist and internationalist state-owned oil companies, financial investors, diversifying service contractors and oil traders. With the growth of specialist stock markets, junior and independent oil companies are better able to raise acquisition finance than previously. As the industry matures and fields deplete, companies specialising in end-of-life reservoirs are filling the space left as oil majors go in search of new opportunities.
The types of transaction are also numerous. As well as corporate takeovers, transactions are completed by a variety of different deal structures, including share and asset sales and farm-in agreements. The choice of structure is important and, as well as providing chapters on each type of acquisition method, this book includes an analysis on the underlying structuring decisions.
This new title, which is authored by specialists in their fields, provides a practical guide to the M&A process in the upstream industry. In addition to providing chapters on acquisition structures, it covers a number of ancillary areas, such as valuations, financing, tax and accounting. Decommissioning liability – an increasingly important factor for both buyers and sellers – is also considered in an M&A context.
This book will be a useful practical guide to different professionals – lawyers, bankers, financial advisers, business executives, accountants and tax advisers – participating in this process.