Exit and Growth Strategies for Middle Market Businesses

Archive for the ‘Energy’ Category

Q3 Energy Industry Newsletter

By Kim Levin | Sep 12, 2014

ENIPG-Deep Sea Oil RigM&A activity in the Energy sector for North American based target companies in Q2 2014 included 143 closed deals according to data provided by S&P Capital IQ.  According to a report from Mergermarket, an industry research group, the average deal value was up more than 60% compared to Q1 driven primarily by energy producing targets. Other strong sectors for energy M&A included oil and gas field services companies and exploration companies. Strategic buyers were particularly active in the space looking to gain market share and new technology by purchasing high growth companies.

Read the Entire Energy M&A 3rd Quarter Newsletter Here

Q2 Energy Mergers & Acquisitions Update

By Kim Levin | May 02, 2014

Solar PanelsM&A activity in the Energy sector for North American based target companies in Q1 2014 included 161 closed deals according to data provided by S&P Capital IQ. Despite the flurry of activity, M&A in the energy sector has declined year-on-year since 2012 according to data published by industry tracker MergerMarket. The total deal value of $15 billion in Q1 2014, was the lowest valued quarter since Q3 2009 ($13.3 billion) and was a 57% decrease from Q1 2013 ($36.3billion). According to a report from international consulting firm PriceWaterhouseCoopers, after a slow year in the energy sector for M&A in 2013, deal activity should surge in 2014 driven by improved technology, greater financing capabilities and political sentiment moving toward a greener world. According to a report from British Petroleum, primary energy demand is expected to increase by 41% between 2012 and 2035, which should spark continued M&A as companies vie for market share.

Read the Entire Energy M&A 2nd Quarter Newsletter Here

Energy Q1 M&A Update

By Kim Levin | Feb 28, 2014

Wind turbineM&A activity in the North American Energy sector for Q4 2013 through Jan. 28, 2014 included 325 deals announced or closed according to data provided by S&P Capital IQ. There is reason to be optimistic regarding M&A in the sector for 2014 and beyond. While the North American market continues to pose challenges, there is always an appetite in consolidating profit-generating entities. Further, despite a modest recovery in the price of natural gas and the retirement of some coal-fired plants, the dynamics of wholesale supply and demand continue to lead lower forward power price curves. Private equity continues to have strong interest in the space driven by utilities and ancillary services relating to oil and gas.

Read the Entire Energy 1st Quarter Newsletter Here

Energy M&A Activity Update

By Kim Levin | Dec 20, 2013

Oil PumpM&A activity in the North American energy sector in the third quarter of 2013 was active with 222 deals announced or closed in the period according to data provided by S&P Capital IQ. The most active energy subsector included oilfield services and midstream assets as new pipelines, oil terminals and crude-by-rail infrastructure grew to accommodate the mounting levels of US oil production and incremental demand for gas.

Read the Entire Energy 4th Quarter Newsletter Here

Energy M&A Activity Update

By Kim Levin | Sep 27, 2013

Wind turbineAccording to a report from Price Waterhouse Coopers (PwC), a leading global consulting firm, M&A activity for the energy industry was down in the first quarter of 2013. There were a total of 39 energy deals with values greater than $50 million, accounting for $17.2 billion in deal value, a decrease from the 53 deals worth $30.4 billion in the second quarter of 2012. On a sequential basis, deal volume in the second quarter dropped by five percent compared to the first quarter of 2013, with deal value falling by 37 percent during the same time period.

Divestitures drove U.S. energy mergers and acquisitions activity in the second quarter of 2013, according to PwC. Upstream deals accounted for 22 transactions, representing 56 percent of total deal volume totaling $6.4 billion. Additionally, there were 10 midstream deals, accounting for 26 percent of total deal volume in the quarter worth a total of $6.2 billion.

Read the Entire Energy 3rd Quarter Newsletter Here



Current Energy M&A Activity

By Herbert "Bud" Boles | Aug 10, 2012


  • Apache Corporation is hydraulically fracturing water flooded properties in the central basin platform of west Texas employing horizontal laterals. Fluids that have been producing for 90 years in fields such as TXL South, North McElroy and Shafter Lake are now reinvigorating the old production.
  • Global Hunter Securities, analysts in a recent report on the Gulf of Mexico development say the picture is encouraging because of the improving regulatory situation and financial commitments by the majors. The main concern is that deep water rigs are not available currently and operators may have to wait until 2014 to get a rig.
  • TransCanada announced it will build, own, and operate the Tamazunchale Pipeline Extension in Mexico. Construction of the pipeline is supported by the Comision Federal de Electricidad, Mexico’s state-owned power company. TransCanada expects to invest approximately USD 500 million in the pipeline and anticipates an in-service date in first-quarter 2014. The project will be 235 km long and have contracted capacity of 630 MMcf/D. The pipeline will use a combination of 30- and 36-in. diameter pipe and have 37 MW of installed compression.
  • Greater Natural Buttes Project, Uintah Basin, Utah.  Anadarko Petroleum Corp. proposes to drill 3,700 natural gas wells in Eastern Utah. These wells are expected to produce about one billion cubic feet of gas a day, enough to heat or cool approximately 5.5 million homes. The natural gas deposits in the Uintah Basin carry higher value liquids such as ethane, propane and butane.
  • The wells will be drilled over a ten year period. This activity will not only create hundreds of new jobs but would increase producing wells in the state by more than 50%.
  • McMoran Exploration of Houston found more potential hydrocarbons at the Blackbeard East ultra deep bypass well. The well is on South Timbalier Block 144 and was drilled to a depth of 33,318 feet. Hydrocarbons were encountered in the Sparta carbonate section of Eocene and Vicksburg section of Oligocene. The Sparta is 300 feet thick and appears to be a hydrocarbon bearing fractured carbonate; the new intervals do not include the 178 net feet of hydrocarbons previously announced above 25,000 feet in the Miocene and Oligocene (Frio). McMoran holds a 72% working interest in the well. Energy XXI 18% and Moncrief Offshore LLC 10%.
  • There is misinformation about frac fluids being pushed into groundwater. Ernest Moniz, professor of physics at MIT has presented an extensive study of natural gas. No evidence of groundwater contamination from fracturing operations was found in thousands of well completions that MIT studied. Environmental impacts are present; however, in the MIT study about one-half of environmental complaints were due to poor well completions and one-third to issues with management of waters at the surface.


Read the quarterly Energy Newsletter in its entirety.

M&A Activity in the Energy Sector

By Kim Levin | Jun 14, 2012

Digging DeepDeal makers are excited because advances in drilling technology such as horizontal drilling and hydraulic fracturing or fracking have made it easier to extract natural gas from shale and other rock formations, creating opening for private equity firms to place big bets in a capital hungry business.  Reference is made to the following graph to illustrate the M&A activity in the U.S. shale business.  The experts agree that the time to get in the play was over the past few years; however, recent windfalls indicate the gamble is still worth the effort with energy related investments showing gains of more than 30% in each of the past two years and have beaten industry overseas for 12 of the past 14 years according to Cambridge Associates.

Read  the Full Energy Newsletter

The Energy Practice Group is a multi-disciplinary group of investment banking advisors within Corporate Finance Associates. Collectively, the Energy Practice Group provides M&A advice to independent and integrated energy companies in all sectors of the energy industry, including power generation, oil & gas, utilities, mining and natural resources, renewable energy and businesses that serve the energy industry, in all aspects of oil and gas land-based transactions, mergers, acquisitions, joint ventures and financial resources. For more information contact your local Corporate Finance Associates office.

Energy Update

By Lee Crawley | Mar 02, 2012

Oil RigWith the high price of gasoline at the pumps the headline story on every nightly news broadcast, CFA’s current quarterly energy newsletter is relevant reading.  Bud Boles, a prominent member of our Energy Industry Practice Group and oil industry veteran, writes a compelling newsletter every quarter analyzing the industry trends and provides insight into what’s in store on the energy front.

The current issue discusses global energy supply and demand, pricing, exploration and recent M&A deals in equipment and services.   I suggest you read the newsletter in its entirety for an in depth summary of the energy sector.   You can download the Q4 2011 Energy Industry Newsletter by clicking here

Posted by Lee Crawley.

The Energy Markets – Heating Up

By Roy Graham | Jun 08, 2011

2010 was a difficult year for the oil and gas industry, but if we’ve learned anything about the resiliency and adaptability of the industry is that 2011 could very well signal a reversal of fortune.  M&A activity in Q1 of 2011 has heated up, the global energy markets are expanding and a new oil superpower is on the horizon.  Read the entire Q1 Energy Newsletter authored by CFA’s Bud Boles and the Energy Industry Practice group for an in depth analysis.

Worldwide E&P Spending

To subscribe to CFA’s Energy Newsletter and to download past issues, please click here.

Posted by Roy Graham.

Constant Change in Energy Markets

By Roy Graham | Mar 04, 2011

Energy markets are in constant flux with sometimes sharp and abrupt spikes occurring while simultaneous long-term trends are evolving on an underlying plane.  The nature of these markets makes it imperative to stay abreast of energy news and to understand the multi-dimensional dynamics of the markets and their affects on the economy and your business growth strategies.  Corporate Finance Associates’ Energy Practice Group is dedicated to staying current on the changes in the Energy Markets and to identifying long-term trends.  Led by Chairman Bud Boles, an industry veteran with more than 50 years of global experience, the CFA Energy Practice Group publishes a quarterly newsletter that reports and analyzes these changes.

Some recent headlines: Crude oil prices were propelled higher at the end of January 2011 due to political unrest in Egypt and the Middle East.  According to the International Energy Agency Oil Market Report, global oil product demand has been revised up by 120 kb/d.  IEA reported that, at 87.8 mb/d in 2010, global oil demand rose by 2.8 mb/d year-on-year, and should reach 89.3 mb/d in 2011 (+1.5 mb/d year on-year).  There are many significant uncertainties that could push oil prices higher or lower than current expectations. 

Among the uncertainties are decisions by key OPEC member countries regarding their production response to the global recovery in oil demand; the rate of economic recovery, both domestically and globally; fiscal issues facing national and sub-national governments; and China’s efforts to address concerns regarding its growth and inflation rates.  In addition, even though Egypt is not a major supplier of crude oil or natural gas to world markets, the recent unrest in that country which has spread throughout the region raises concerns over world energy supplies.   Key transit routes for energy and other goods could be disrupted, while pipelines and ports could become targets for warring factions.

To read the 2010 Q4 Energy Newsletter for more Energy Market information click here.

Posted by Roy Graham.