Post Tagged with: "Mergers and Takeovers"

US$4.5 Billion Deal Reached:  Suncor to Acquire Canadian Oil Sands

US$4.5 Billion Deal Reached: Suncor to Acquire Canadian Oil Sands

SU, COS Come to Terms on Sweetened Offer After months of posturing and wrestling for shareholder approval, the boards of Suncor (ticker: SU) and Canadian Oil Sands (ticker: COS) have reached a merger agreement. The joint announcement, released on January 18, 2015, includes a sweetened transaction value of CN$6.6 billion (about US$4.5 billion) for COS, inclusive of an estimated CN$2.4 billion (about US$1.6 billion) in debt. The transaction is a straight stock-for-stock exchange and each COS shareholder will receive 0.28 SU shares (CN$8.74/share) in exchange for each COS share, a 12% increase compared to the initial offer of 0.25 SU shares (CN$7.81/share) in exchange for a full COS share. Once the merger is complete, the Suncor will own nearly half the interest in Alberta’s massive Syncrude oil sands project. COS estimates the project will average 2016 gross production of 260 to 301 MBOPD in a guidance document. Completion of the[Read More…]

Canadian Oil Sands Fends off Suncor’s Hostile Bid… For Now

Canadian Oil Sands Fends off Suncor’s Hostile Bid… For Now

Suncor Extends Expiration Date after Unsuccessful Initial Attempt Canadian Oil Sands (ticker: COS) gets its wish to remain an independent company – at least for the time being. The hostile takeover attempt by Suncor (ticker: SU) failed to achieve the required approval of two-thirds of COS shareholders, as the deadline passed on January 8, 2016. The major integrated oil company, with a market capitalization of more than $32 billion, was offering a total of $5 billion including debt (CN$6.6 billion) in a proposed stock-for-stock acquisition of Canadian Oil Sands. Suncor tried to entice COS shareholders by highlighting the stability of a large-scale company and a shareholder return program, including a dividend that was 45% higher than that of COS. Rebuttals from Canadian Oil Sands call the offer opportunistic, saying COS shares are closely correlated to the price of crude oil and will quickly rebound in turn with the eventual commodity[Read More…]

Suncor vs. Canadian Oil Sands: As Deadline Approaches, War of Words Heats Up

Suncor vs. Canadian Oil Sands: As Deadline Approaches, War of Words Heats Up

January 8 Deadline Looms in Suncor’s Hostile Takeover Attempt Ernst & Young is one of many analyst firms expecting energy-related divestitures and stock-for-stock deals to rise in 2016, and one of the year’s first deals could involve Canadian Oil Sands (ticker: COS) and Suncor (ticker: SU). But if Canadian Oil Sands gets its wish, the potential merger will be nothing more than a failed attempt. Less than Two Weeks Away Suncor has been in pursuit of COS since March 2015, but buyout offers aimed at the Canadian Oil Sands board of directors have been unsuccessful. SU resorted to a hostile takeover attempt in October, and both sides continue to make their case to COS shareholders via literature, presentations and specialized web pages. On December 29, 2015, Canadian Oil Sands sent another letter to its shareholders urging against the merger, calling SU’s offer a “Hail Mary low-ball bid.” A key selling[Read More…]

Canadian Oil Sands Highlights Cost Efficiencies, Defends Strategy Behind Suncor Takeover Bid

Canadian Oil Sands Highlights Cost Efficiencies, Defends Strategy Behind Suncor Takeover Bid

CEO Kubik: An independent COS offers more upside to shareholders (Editor’s note: all figures in Canadian dollars) On December 1, 2015, Canadian Oil Sands (ticker: COS) issued a press release with an accompanying conference call detailing its 2016 budget and what it described as a “new era of lower cost operations.” The timing comes as no coincidence, as Suncor’s $6.6 billion (including debt) hostile takeover bid is scheduled to expire at the end of the week. Suncor owns 12% of the Syncrude oil sands consortium project in Alberta, while Canadian Oil Sands (whose operations focus exclusively on the project) owns 37% interest – the most of the any of the seven companies. COS adopted a “poison pill” to fend off SU’s bid and has issued a handful of news releases criticizing what they feel to be a low-ball offer. Suncor has sent letters to COS shareholders, and any visitors to[Read More…]

Western Refining Pitches $2.56 Billion Buyout Offer for Northern Tier Energy

Western Refining Pitches $2.56 Billion Buyout Offer for Northern Tier Energy

Purchased First NTI Stake in 2013 Western Refining (ticker: WNR) is attempting to enhance its Midwest footprint, proposing a $2.56 billion buyout deal of Northern Tier Energy LP (ticker: NTI). WNR already owns 100% of the partnership and 38% of NTI shares. The proposal consists of a cash-and-stock offer that includes $17.50 and 0.2266 shares of WNR in exchange for one NTI share, amounting to a premium of 15% relative to Northern Tier’s average 20-day closing price as of October 23, 2015. Western Refining operates refineries in El Paso, Texas, and Gallup, New Mexico, with retail businesses throughout Arizona, Colorado, New Mexico and Texas. WNR serves as the general partner of its master limited partnership, Western Refining Logistics, LP (ticker: WNRL), of which it has 66% ownership. WNRL entails terminals and storage facilities, in addition to approximately 300 miles of crude oil pipelines. NTI consists of downstream and retail businesses[Read More…]

UPDATE: Canadian Oil Sands Board Rejects Suncor’s $5 Billion Hostile Takeover Attempt

UPDATE: Canadian Oil Sands Board Rejects Suncor’s $5 Billion Hostile Takeover Attempt

COS Counters SU Offer by Adopting Shareholder Rights Plan The board of Canadian Oil Sands (ticker: COS) turned down a $5 billion offer from Suncor (ticker: SU) two days after its initial proposal, offering a shareholder rights program and providing additional insight into negotiations between the two oil sands companies. The shareholder program is being referred to as a “poison pill” by the investment community, and is a course of action designed to make the hostile takeover more difficult for Suncor. As part of the program, existing shareholders can execute a share purchase right on each share outstanding as of 2:01 a.m. Eastern Time on October 6, 2015. The rights will officially be triggered if anyone buys 20% or more of the company, which will then allow shareholders to buy stock at a “substantial” discount. Timing is the major issue between COS’ shareholder program and SU’s hostile takeover. In its[Read More…]

Energy Transfer Finally Locks Down Deal for Williams Companies at $37.7 Billion

Energy Transfer Finally Locks Down Deal for Williams Companies at $37.7 Billion

ETE Becomes Largest Energy Infrastructure Group Enterprise Value Now Exceeds that of BP, Total and Petrobras Energy Transfer Equity’s (ticker: ETE) long pursuit of Williams Companies (ticker: WMB) has come to an end. On September 28, 2015, ETE announced the acquisition of WMB for total consideration of $37.7 billion, including debt, representing a 10% premium to WMB stock price prior to the opening bell. The new purchase price is a far cry from its $53.3 billion offer in June 2015, which was turned down by WMB due to “undervaluation.” The June offer represented a 32.4% premium to WMB’s closing price on June 19, 2015, but the latest offer provides a cash option for WMB as opposed to the previous offer that was an all-stock offering. “What Williams has done is provide a cash-exit strategy for its shareholders, but at a lower price,” said Skip Aylesworth, a manager for Hennessy Funds Trust,[Read More…]

September 28, 2015 - 7:03 pm Downstream, Mergers & Acquisitions, MLPs, Oil and Gas 360 Articles
Sanchez Production Partners Acquires Eagle Ford Midstream Assets for $345 Million

Sanchez Production Partners Acquires Eagle Ford Midstream Assets for $345 Million

Sanchez Production Partners (ticker: SPP), a midstream-focused Master Limited Partnership, increased its footprint in the Eagle Ford with a $345 million cash acquisition announced on September 28, 2015. The assets, purchased from Sanchez Energy Corporation (ticker: SN) consist of 150 miles of gathering lines and associated infrastructure in four gathering and processing facilities. The transaction is expected to close in October 2015. The assets are located in the western part of SN’s Catarina asset, which has been the target area of Sanchez’s recent operations. In accordance with the sale, SN will engage in fixed gathering rates for an initial 15 year term. The first five years will require minimum delivery commitments of 10.2 MBOPD and 142 MMcf/d. The Catarina asset as a whole produced 71% of SN volumes in Q2’15, equaling about 38.2 MBOEPD. The latest acquisition is the second to be announced between SPP and SN – the first[Read More…]

September 28, 2015 - 6:47 pm Analytics, Mergers & Acquisitions, MLPs, Oil and Gas 360 Articles
Update: Weatherford Intl. Cancels Capital Raise in Response to Market Backlash

Update: Weatherford Intl. Cancels Capital Raise in Response to Market Backlash

WEATHERFORD UPDATE A single-day stock price drop of more than 17% was apparently enough for Weatherford International (ticker: WFT) to cancel its plans for a capital raise. WFT shares have recovered to an extent, but are still trading roughly 10% lower compared to when the raise was first announced. “While investor interest was strong for this offering, we are unwilling to sell securities at prices that do not reflect the value we have created at Weatherford,” the company said in its press release. WFT added it expects to deliver positive fee cash flow “in 2015 and years beyond.” Weatherford’s Audible Analyst notes covering the release lauded WFT’s decision to cancel the raise, especially considering the sell-off by the market. Further speculation arose that WFT may be entirely removing itself from contention for assets owned by Halliburton and Baker Hughes’ (tickers: HAL and BHI), which some believed may be a slight[Read More…]

September 22, 2015 - 2:28 pm Mergers & Acquisitions, Midstream, Oil and Gas 360 Articles
Williams Companies Weighing Takeover Offers; Energy Transfer Still in the Picture 

Williams Companies Weighing Takeover Offers; Energy Transfer Still in the Picture 

Analysts have pegged scores of oil and gas companies as potential takeover targets in the new commodity environment, but Williams Companies (ticker: WMB) is one of the few who has remained in the acquisition spotlight ever since a failed takeover attempt was made public in June. The rejected offer of $53.1 billion from Energy Transfer Equity (ticker: ETE) was refused by Williams, with the company saying the unsolicited offer was a significant undervaluation. At the time, the proposal represented a 32.4% premium to WMB’s closing price on June 19, 2015, and did not include the value of its impending merger with its limited partnership. Energy Transfer Still in Pursuit Today, Reuters reported Spectra Energy (ticker: SE) pulled out of the bidding process for Williams, likely strengthening Energy Transfer’s position for another takeover bid. Comments from ETE regarding a merger have understandably been few and far between, but the management team[Read More…]

September 14, 2015 - 7:02 pm Downstream, Midstream, MLPs, Oil and Gas 360 Articles, Regulatory
Not Your Granddaddy’s OFS Provider: Schlumberger and Cameron Are Primed to Change How it’s Done at the Wellhead

Not Your Granddaddy’s OFS Provider: Schlumberger and Cameron Are Primed to Change How it’s Done at the Wellhead

Schlumberger Creates “Pore to Pipeline” Business with $14.8 Billion Takeover of Cameron Intl. While Halliburton (ticker: HAL) and Baker Hughes (ticker: BHI) labor over the fine print of their proposed merger, their top oil service rival is making moves of its own. On August 26, 2015, Schlumberger (ticker: SLB) announced the $14.8 billion acquisition of Cameron International (ticker: CAM) in a joint press release. The merger combines SLB’s specialization in reservoir and well technologies with CAM’s expertise in surface, drilling, processing and flow control technologies. In a conference call following the announcement, Paal Kibsgaard, Chairman and Chief Executive Officer of Schlumberger, said the entity will “launch a new era of complete drilling and production system performance.” The combined companies employ approximately 132,000 people and reported combined 2014 revenues of $59 billion, representing a 20% increase to SLB’s revenue base. A note from Global Hunter Securities expressed their surprise on the[Read More…]

Encana in the Haynesville: From Entry to Today’s $850 Million Exit

Encana in the Haynesville: From Entry to Today’s $850 Million Exit

Calgary-based Encana Corporation (ticker: ECA) made a big jump in reducing its debt on August 25, 2015, selling the entirety of its assets in the Haynesville for total cash consideration of $850 million. The buyer, GEP Haynesville (a joint venture involving GeoSouthern and funds managed by GSO Capital Partners LP), receives 217 MMcf/d of production and 720 Bcfe of proved reserves as of year end 2014. Approximately 300 net wells are currently operating on the 112,000 net acres spread across northern Louisiana. Per terms of the agreement, ECA will transport and market GeoSouthern’s production on a fee basis for the next five years. In a company statement, Doug Suttles, Encana’s president and CEO, said the transaction “eliminates our midstream commitments in the Haynesville and captures ongoing revenue upside through a gas marketing arrangement.” ECA management believes the arrangement will reduce its midstream commitments by approximately $480 million on an undiscounted[Read More…]

MLP of Marathon Petroleum Acquires MarkWest Energy Partners for $20 Billion

MLP of Marathon Petroleum Acquires MarkWest Energy Partners for $20 Billion

Combined Companies will Create Fourth Largest MLP MPLX LP (ticker: MPLX), the master limited partnership (MLP) vehicle of Marathon Petroleum (ticker: MPC), has announced the oil and gas industry’s third-largest acquisition to date in 2015. According to news releases from the three companies involved, MPC and MPLX have signed a definitive agreement to acquire MarkWest Energy Partners LP (ticker: MWE) for total consideration of $20 billion, including approximately $4.2 billion in debt. The acquisition will be completed as a unit-for-unit transaction, with MWE shareholders exchanging each unit for 1.09 MPLX common units and a one-time cash payment of $3.37 per share. The exchange represents a premium of 32% per MWE’s closing price on July 10. MPC will contribute $675 million in cash to MPLX to fund the transaction and will continue to be its primary shareholder, possessing 19% of its common units. The deal is expected to close in Q4’15.[Read More…]

July 13, 2015 - 6:16 pm Midstream, MLPs, Oil and Gas 360 Articles
Crescent Point Energy Buys Out Partner for Approximately $204 Million

Crescent Point Energy Buys Out Partner for Approximately $204 Million

Crescent Point Energy (ticker: CPG) is expanding its presence in Alberta as the result of a stock for stock merger. On July 2, 2015, the Calgary-based exploration and production company announced the purchase of Coral Hill Energy Ltd. for C$258 million (approximately US$204 million), including the assumption of C$132 million in net debt (approximately US$104 million). CPG was engaged with Coral Hill for the past five years as part of a joint venture on the Swan Hills Beaverhill Lake resource play of Western Alberta. Coral Hill’s net production was about 3,200 BOEPD (94% oil), the majority of which were sourced from the Swan Hills asset. Overall, the company holds more than 500 net sections of land with proved reserves of 10 MMBOE, including approximately 100 net internally identified drilling locations. Three waterflood tests were completed and described as “encouraging results to date in terms of reduced overall decline rates and[Read More…]

Cenovus Sells Oil and Gas Royalty Unit for $3.3 Billion

Cenovus Sells Oil and Gas Royalty Unit for $3.3 Billion

In an effort to strengthen its balance sheet, Cenovus (ticker: CVE) has sold its royalty unit to Ontario Teachers’ Pension Plan (Teachers’) for gross cash proceeds of approximately $3.3 billion. The unit, named Heritage Royalty Limited Partnership (HRP), is a wholly owned subsidiary consisting of 4.8 million gross acres of royalties and mineral fee titles in Alberta, Manitoba and Saskatchewan. Total volumes for HRP, considering royalties and working interests, totaled about 14.8 MBOEPD in Q1’15. CVE management said it considered an initial public offering, among other options, for HRP, but in the end believed an outright sale was the most beneficial for the company and its shareholders. The transaction metrics equated to $223,000 per flowing BOEPD, while the estimated cash flow of HRP is $30 million. Revenues in 2014 totaled about $320 million in fiscal 2014. In the press release, Brian Ferguson, president and chief executive officer of Cenovus, said[Read More…]

Core Laboratories Acquires Sanchez Technologies

Core Laboratories Acquires Sanchez Technologies

Core Lab (ticker: CLB) only company capable of generating EOR data at 20,000+ PSI in GOM Deepwater Plays Core Laboratories (ticker: CLB), a global leader in reservoir description, production enhancement and reservoir management services, announced the purchase of Sanchez Technologies in an all-cash transaction on June 22, 2015. Terms were not disclosed. Sanchez Technologies, based in France, designs and manufactures pressure-volume-temperature (PVT) equipment to for use in hydrocarbon reservoirs. In the release, Core said it has fully adopted the Sanchez series of PVT instruments, which generate data sets concerning saturation pressures, compositional characterizations, formation volume factors, viscosities and gas-to-oil ratios. Sanchez’s technologies are particularly effective for deep reservoirs, and CLB is the only oilfield service company capable of generating data from reservoirs with pressure up to 29,000 pounds per square inch, which are generally encountered at depths of 20,000 feet. The Gulf of Mexico (GOM), in particular, is a focus[Read More…]

UAE’s Emirates National Oil Company Buys Out Subsidiary for $3.7 Billion

UAE’s Emirates National Oil Company Buys Out Subsidiary for $3.7 Billion

Emirates National Oil Company (ENOC), a wholly owned entity of the Dubai government, will buy out Dragon Oil for $3.7 billion. Neither company has confirmed the announcement but several news outlets are reporting an agreement has been reached. ENOC already owns 54% of Dragon and will acquire the remaining interest for 750 pence per share – a premium of 47% and placing the overall value of the company at $5.8 billion. This is the third reported offer this year and beats previous bids of 735 and 650 pence per share in May and March, respectively. A buyout offer of 455 pence per share was offered five years ago, reports The International Business Times. Dragon Oil’s production is sourced mainly from Turkmenistan and the company reported average production of 79 MOBPD in 2014. Current production is reported at 100 MBOPD and is sustainable for the next five years, said company management.[Read More…]

June 15, 2015 - 3:25 pm Mergers & Acquisitions, Oil and Gas 360 Articles, OPEC
Ring Energy Enters the Delaware Basin with $75 Million Acquisition

Ring Energy Enters the Delaware Basin with $75 Million Acquisition

Extends Permian Position Ring Energy (ticker: REI) followed through on its acquisition comments in its Q1’15 conference call, announcing purchase of 14,000 net acres in the Delaware Basin in a news release on May 26, 2015. The $75 million transaction includes current net production of 1,300 BOEPD, net reserves of 4.7 MMBOE and a PV-10 value of $128.5 million. Average working interest is 98% to Ring, along with an average net revenue interest of 78%. David Fowler, President of Ring Energy, said in the company’s Q1’15 call that REI was seeking a purchase in the “$50 to $100 million size.” The new assets will increase the company’s net acreage and net production by 41% and 47%, respectively, and falls right in the middle of the anticipated M&A budget. The deal is expected to close on June 30, 2015, which would fall within the Q2’15 reporting period. “This acquisition represents an[Read More…]

Williams Merges with LP Subsidiary in $13.8 Billion Deal

Williams Merges with LP Subsidiary in $13.8 Billion Deal

In a move designed to simplify the corporate structure, streamline governance and position itself for investment-grade ratings, Williams (ticker: WMB) is merging with its limited partnership subsidiary in an all stock-for-unit transaction. The merger is valued at $13.8 billion and is expected to close in the fall of 2015. Williams owns 60% of its subsidiary, Williams Partners (ticker: WPZ), and is one the largest oil and gas infrastructure providers in North America. WPZ’s pipeline footprint spans more than 33,000 miles and touches approximately 30% of U.S. natural gas. WPZ unitholders are in line to receive 1.115 WMB shares per unit, representing a 12.6% premium to its 20-day average closing price. WPZ’s transferred units will represent 27% of the combined entity. WPZ stock ended 22% higher after the announcement on May 13, 2015. The Williams conglomerate plans on increasing its dividend to $2.64/share on an annualized basis in Q3’15 and expects[Read More…]

May 13, 2015 - 7:00 pm Midstream, MLPs, Oil and Gas 360 Articles
Noble Energy Jumps into Texas Oil Patch with $3.9 Billion Acquisition of Rosetta Resources

Noble Energy Jumps into Texas Oil Patch with $3.9 Billion Acquisition of Rosetta Resources

“Keeping the Financial Firepower” Noble Energy (ticker: NBL) is a large-cap exploration and production company with oil and gas operations worldwide, but the Houston-based company previously held no assets in Texas. Until now. On May 11, 2015, Noble Energy announced the all-stock acquisition of Rosetta Resources (ticker: ROSE) for $3.9 billion, including ROSE’s $1.8 billion in debt. In turn, Noble gains 50,000 net acres in the Eagle Ford Shale and 56,000 net acres in the Permian Basin, which includes more than 1,800 gross horizontal drilling locations and net unrisked resource potential of 1 billion BOE. The metrics work out to $58,500/BOEPD of production and $13.65/BOE of proved reserves. The deal represents a 28% premium to Rosetta shareholders in consideration to ROSE’s average stock price for the last 30 days and a 38% premium to its closing price on May 8, 2015. ROSE shareholders are in line to receive 0.542 shares[Read More…]

Gulfport Energy Expands Utica Position with $300 Million Acquisition

Gulfport Energy Expands Utica Position with $300 Million Acquisition

GPOR Offers Stock, Debt to Finance Purchase of Paloma Partners Gulfport Energy (ticker: GPOR) has increased its Utica Shale footprint to approximately 212,000 gross leased acres (208,000 net) with the purchase of 24,000 net nonproducing acres in Belmont and Jefferson Counties from Paloma Partners III, LLC. As announced in a news release on April 15, 2015, the sale has a price tag of $300 million and is expected to close in Q3’15. GPOR believes the new acreage provides 150 drilling locations on 160-acre spacing and plans on adding a full-time rig to the area in Q4’15. Analyst reports believed the deal was reasonably priced. SunTrust Robinson Humphrey put the deal in line with estimates and Capital One Securities said the cost was below its modeled price of $15,000 per acre. “We view the deal as fair but it was not inexpensive, which we think is an indication of the continued[Read More…]

Royal Dutch Shell Goes All-In with $70 Billion Purchase of BG Group

Royal Dutch Shell Goes All-In with $70 Billion Purchase of BG Group

Largest combination since the $80 billion Exxon+Mobil deal in 1998 Royal Dutch Shell (ticker: RDS.B) announced the recommended takeover of BG Group (ticker: BG) in a 75-page release issued on April 7, 2015. The cash-and-share purchase valued at roughly $70 billion – the largest proposed oil and gas deal since Exxon’s (ticker: XOM) $80 billion acquisition of Mobil in 1998. Shell’s offer represents a 50% premium to BG Group’s closing share price on April 7, 2015, and a 52% premium if the 90-day average trading price is considered. BG shareholders are in line to receive a value of $20.12 per share, consisting of $5.13 in cash and 0.4454 Shell B shares. Upon completion, BG shareholders will account for 19% of the combined company. Shell’s Annual General Meeting is currently scheduled for May 19, 2015, in the Netherlands. The scheme is conditional on shareholder approval of at least 75% and must[Read More…]

Targa Resources Finalizes $7.7 Billion Acquisition of Atlas Energy Assets

Targa Resources Finalizes $7.7 Billion Acquisition of Atlas Energy Assets

Targa Resources (ticker: TRGP) and Targa Resources Partners (ticker: NGLS) has officially acquired the midstream assets of both Atlas Energy (ticker: ATLS) and Atlas Pipeline Partners (ticker: APL). The non-midstream assets of ATLS will be spun off to Atlas Energy Group and will continue to trade under the ATLS ticker. The transaction is valued at $7.7 billion, and includes $5.8 billion for Atlas Pipeline Partners and $1.9 billion for the ATLS midstream assets. The announcement was first made on October 13, 2014, and was finalized on February 27, 2015, after shareholders approved the merger. Per the terms of the spinoff, each ATLS unitholder receives $9.12 in cash and 0.1809 shares of TRGP for each ATLS share. Each APL untiholder will receive $1.26 in cash and 0.5846 shares of NGLS. Targa’s New Empire Targa Resources broadened its existing positions in the Permian, Bakken, Barnett, Louisiana Gulf Coast and Mont Belvieu markets[Read More…]

Energy Transfer Partners to Become Second-Largest MLP in $18 Billion Acquisition

Energy Transfer Partners to Become Second-Largest MLP in $18 Billion Acquisition

Energy Transfer Partners (ticker: ETP) and Regency Energy Partners (ticker: RGP) announced plans for a definitive merger in a joint press release issued on January 26, 2015. The proposal consists of a unit-for-unit transaction with an implied value of approximately $18 billion, including the assumption of $6.8 billion in debt from RGP. Both Master Limited Partnerships (MLPs) are among the ten largest companies based on enterprise value in EnerCom’s MLP Scorecard. The combined entity will be the second-largest MLP company in the industry, trailing only Enterprise Products Partners (ticker: EPD). Energy Transfer Equity (ticker: ETE) owns the general partner and 100% of incentive distribution rights of both ETP and RGP. Per terms of the transaction, RGP shareholders are in line to receive 0.4066 units of ETP in addition to a cash payment of $0.32 per share, implying an all-in price of $26.89 per RGP share (13% premium to its last[Read More…]

January 26, 2015 - 6:36 pm Mergers & Acquisitions, MLPs, Oil and Gas 360 Articles
Kinder Morgan Lands Bakken Position with $3 Billion Purchase

Kinder Morgan Lands Bakken Position with $3 Billion Purchase

Richard Kinder to Step Down from CEO Position Kinder Morgan (ticker: KMI) may have the longest gas pipeline network in North America, but the continent’s third largest energy company (based on enterprise value), surprisingly, did not have a stake in the Williston Basin. That is, until yesterday. The midstream giant entered the Bakken with the $3.0 billion purchase of Hiland Partners on January 22, 2015. Hiland was privately held and owned by Harold Hamm, Chief Executive Officer of Continental Resources (ticker: CLR). Continental produced an average of 122.6 MBOEPD from the Bakken in Q3’14, second to only Whiting Petroleum (ticker: WLL), which produced in excess of 150 MBOEPD if its acquisition of Kodiak Oil & Gas is included. Many analysts, including Charles Marshall, Vice President of MLP Equity Research for Capital One Securities, had expected KMI to make a move in the revamped commodity environment. Other major midstream companies like[Read More…]

January 22, 2015 - 6:20 pm Earnings, Midstream, MLPs, Oil and Gas 360 Articles
Halliburton, Baker Hughes Each Close on Record Years in Q4’14 Results

Halliburton, Baker Hughes Each Close on Record Years in Q4’14 Results

Two oilservice giants standing tall in face of downturn The oil and gas industry may be bracing for a downturn in drilling operations, but Halliburton (ticker: HAL) and Baker Hughes (ticker: BHI) are entering 2015 on the heels of one of the finest years in each company’s respective history. Discussions for the merger are continuing as planned and are expected to close in 2H’15. HAL said the valuation will fluctuate in relation to its common stock price, but current valuations place BHI shares at 1.12 HAL shares in addition to $19.00 in cash. The boards of both companies unanimously approved the $34.6 billion deal in November. If the merger is successful, BHI shareholders are in line to hold a 36% stake in the “new” Halliburton. In a conference call following the merger announcement, HAL said it expects synergies of $2 billion once the acquisition is complete. Mark McCollum, Chief Financial[Read More…]

January 20, 2015 - 5:18 pm Earnings, Midstream, Oil and Gas 360 Articles, Oilfield Services
Repsol Splashes into M&A Market with $13 Billion Acquisition of Talisman Energy

Repsol Splashes into M&A Market with $13 Billion Acquisition of Talisman Energy

Looming mergers and acquisitions is a popular debate in the sub-$60 oil market, and Spain’s Repsol (ticker: REPYY) made the first splash with the US$13.0 billion acquisition of Talisman Energy (ticker: TLM) on December 16, 2014. The deal includes $8.3 billion in shares, acquired entirely through cash, and the assumption of TLM’s debt of $4.7 billion. The deal includes a $270 million termination fee payable to TLM if the transaction is not completed. Repsol Chairman Antonio Brufau said: “This is a transformative and exciting deal which will make us one of the world’s most significant players and which will allow us to grow as a company and reinforce Repsol as a solid and competitive integrated player.” In a conference call following the release, management mentioned TLM’s assets provide Repsol with more exposure to OECD countries, and “employs our capital in areas with less risk,” said Josu Jon Imaz, Chief Executive[Read More…]

Whiting Petroleum Completes $6 Billion All-Stock Acquisition of Kodiak Oil & Gas

Whiting Petroleum Completes $6 Billion All-Stock Acquisition of Kodiak Oil & Gas

Whiting Petroleum (ticker: WLL) is officially the largest producer of the Bakken/Three Forks shale play, following its $6.0 billion purchase of Kodiak Oil & Gas on December 8, 2014. The transaction was first announced on July 13, 2014, and involves the $2.2 billion assumption of Kodiak net debt. Kodiak shareholders now hold approximately 29% of WLL. Whiting arranged $3.5 billion in bank commitments to finance the transaction and has sold roughly $1.1 billion in properties since the beginning of Q3’13. Its debt to market cap ratio is currently 62%. By comparison, the average of 86 peer companies in EnerCom’s E&P database has a median debt to market cap ratio of 86%. Whiting currently has only $100 million drawn on its credit facility. Its estimated borrowing base is expected to be roughly $4.5 billion. The New Whiting As of year-end 2013, the combined company has more than 600 MMBOE of proved reserves[Read More…]

Halliburton, Baker Hughes to Merge in $34.6 Billion Deal

Halliburton, Baker Hughes to Merge in $34.6 Billion Deal

Includes $3.5 Billion Payout to Baker Hughes if Merger Fails to Gain Antitrust Approval The rumblings of a landmark oilservices deal that began on Thursday evening came to fruition over the weekend. By Monday, November 17, 2014, Halliburton (ticker: HAL), the second largest oilservices provider, announced plans to merge with rival Baker Hughes (BHI). BHI, the world’s third largest oilservices provider by market capitalization, provides HAL with a greater stake in the United States. Total consideration for the deal is an equity value of $34.6 billion on consideration of $78.62 per BHI share (40.8% premium). BHI shareholders are in line to receive 1.12 HAL shares and $19 in cash for each share of Baker Hughes, equating to a split of 76% stock and 24% cash. Following its completion, BHI shareholders will own approximately 36% of the new HAL. The transaction was unanimously approved by both Boards and is expected to[Read More…]

Two of Top Three OilService Companies Speak of Merger

Two of Top Three OilService Companies Speak of Merger

Halliburton (ticker: HAL) and Baker Hughes (ticker: BHI) have begun preliminary talks of a merger, Dow Jones reported on November 13, 2014. BHI confirmed the report later in the evening but did not make any guarantees as to the completion of the merger. “Baker Hughes does not intend to comment further on market speculation or disclose any developments unless and until it otherwise deems further disclosure is appropriate or required,” the statement read. HAL and BHI hold enterprise values of approximately $51 and $26 billion, respectively, according to EnerCom’s OilService Weekly report. The two giants are the second and third largest oilservice companies in the world, trailing only Schlumberger (ticker: SLB) and its enterprise value of $137 billion. The three companies together make up approximately 64% of the entire oilservice sector in EnerCom’s report, which consists of 44 companies. If completed, the combination will be the second largest energy deal of the[Read More…]