Oil and gas deals got bigger and were dominated by foreign buyers placing bets on US shale plays, according to a report on US energy mergers and acquisitions released Wednesday by PwC's energy consulting practice.
The total number of energy deals -- upstream, midstream and downstream -- more than doubled to $46.8 billion in the third quarter compared with the same time last year, with $22.6 billion worth of deals in shale plays alone, PwC said.
Shale plays accounted for 80% of the $28.1 billion total for upstream deals done in the third quarter, PwC said, quadruple the value of shale deals done a year ago. Shale accounted for 46% of all energy M&A in third quarter, PwC said.
"Shale-gas assets continue to attract vast interest from oil and gas companies with five of the top 10 largest deals in the third quarter involving shale plays," Steve Haffner, a Pittsburgh-based partner with PwC's energy practice, said in a statement.
Activity in the Marcellus Shale continues to percolate as new players enter and existing companies expand acreage, Haffner said.
Interest in the Utica shale remains firm as companies like the potential of a stacked play (the Marcellus lies atop the Utica in parts of Pennsylvania and Ohio) and the cost savings associated with sharing infrastructure already built for the Marcellus, Haffner added.
Foreign investors and operators more than tripled the value of their US M&A activity in the third quarter, PwC said.
Foreign firms did a total of $37.3 billion in 22 deals in the third quarter, PwC said, nearly triple the value of last year.
International firms such as Norway's Statoil, India's Reliance and China's CNOOC have all cut deals, mostly joint ventures, for shale oil and shale gas in the past year.
"Despite a number of headwinds in the third quarter with volatile global equity markets and commodity prices, deals in the energy sector continued as companies sought to take advantage of opportunities in shale to gain technology know-how," said Rick Roberge, principal in PwC's energy M&A practice.
For deals greater than $50 million, there were 24 upstream deals totaling $28.1 billion, or 57% of total energy deal value, up 52% from the previous year, PwC said.
Oilfield equipment followed in deal activity, with $7.3 billion, while midstream deals contributed $10.4 billion, according to the PwC analysis.
