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In a week that saw oil prices crash from recent highs on the back of a flurry of poor economic data across the globe, the E&P sector remained bullish. Two potential billion dollar deals were announced, according to our analysis of this week’s deals.

One deal that was definitely in excess of a billion dollars was the further divestment of a 10% stake in YPF Sociedad Annima (YPF) by Repsol (OTC:REPYF)-YPF to the Petersen Group for $1.3 billion.
Repsol has been steadily decreasing its interest in its South American-focused subsidiary following increased government intervention and taxes, especially within Argentina and Bolivia. The value of YPF has remained flat in the previous four years and is currently 38% lower than its peak in 2005. Repsol will be hoping that the money raised on the sale will see a better return from its intended target in the deepwater resources of Brazil. Following this deal, Repsol’s stake in YPF- which once stood at 98%- will decrease to 58%. That's just 7% shy of its target final interest in YPF of 51%.

The other potential billion dollar deal came from Chevron’s (CVX) acquisition of 228,000 acres in the Marcellus shale play from Chief Oil & Gas. The terms of the transaction were undisclosed but as the cost per acre in the Marcellus shale play can range from $4,000 per acre for an undeveloped asset to over $10,000 per acre for a partially developed property, the estimated price could be between $1-$2 billion. Judging by Chevron’s disclosure that the acquisition is likely to add 5 trillion cubic feet of gas reserves, it’s likely that the consideration will lie in the middle to high portion of this estimate.

In Canada, Crew Energy (OTC:CWEGF) sealed a transformational deal, which will almost double the company’s production whilst increasing the liquids weighting of the company’s portfolio of assets. Crew is acquiring Caltex Energy Inc, a company with liquids-rich gas assets in the Peace River area and heavy oil operations in the Lloydminster area of Saskatchewan for C$623 million. The normalised cost per proved boe equates to C$19.65, which looks to be at a slight premium to an assumed fair price of C$17 based on the resource type and stage of development.

The Gulf of Mexico-focused, Dynamic Offshore Resources completed its eighth transaction since its inception in 2008 with the $42.5 million acquisition of Gulf of Mexico shelf assets. The price looks attractive at just $5.85 per proved & probable boe. Even factoring in the $16 million of increased asset retirement obligations that the properties will add, the normalised cost per proved and probable boe still equates to barely over $8.

Top Deals of the Week


AcquirerTarget CompanyTarget Business SegmentBrief DescriptionTotal Acquisition Cost (000)
Petersen GroupYPF Sociedad AnonimaIntegratedGrupo Petersen exercises its option to acquire a further 10% of YPF from Repsol-YPF1,304,000
Kinder Morgan Energy Partners, L.P.Petrohawk Energy (HK)MidstreamKinder Morgan Energy Partners acquires a 50% interest in KinderHawk Field Services (the natural gas gathering and treating services provider in the Haynesville Shale) and a 25 percent interest in Petrohawk's natural gas gathering and treating business in the Eagle Ford Shale920,000
Crew Energy LtdCaltex Energy Inc.E&PCrew Energy acquires Caltex Energy Inc., a private Canadian based E&P company652,055
Dynamic Offshore Resources, LLCUnspecifiedE&PDynamic Offshore Resources acquires Gulf of Mexico properties via two transactions42,500
Japan Australia LNG (MIMI) Pty. LtdTap Oil Limited (OTC:TAPOF)E&PJapan Australia LNG, a 50:50 joint venture between Mitsubishi and Mitsui acquires a 25% interest in WA-351-P in the Carnarvon Basin in Australia from Tap Oil40,154
Paxton Energy IncVirgin Oil Company, Inc.E&PPaxton Energy, Inc. acquires Virgin Oil Company, Inc.14,700
Eurogas Corp.Torque Energy Inc. (OTC:TQEEF)E&PEurogas Corp acquires Torque Energy Inc.8,368
Ante5, Inc.Twin City Technical, LLC; Irish Oil and Gas, Inc.E&PAnte5, Inc acquires 8,000 acres in the Bakken shale play from Twin City Technical, LLC, a North Dakota limited liability company, and Irish Oil and Gas, Inc.6,035
PluspetrolROC OilE&PPluspetrol Angola Corporation acquires ROC Oil's remaining 10% interest in the Cabinda Onshore South Block, Angola5,000
ChevronChief Oil & Gas LLCE&PChevron acquires 228,000 acres of Marcellus shale acreage from Chief Oil & Gas LLC for an undisclosed priceUndisclosed

EvaluateEnergy tracks every global upstream deal on a daily basis, estimating normalised deal value, in-depth financial and operating detail behind each deal and an explanation and opinion on deal rationale . Normalised deal value reveals underlying reserve values.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Source: Billion Dollar Energy Deals Still Coming Despite Weaker Market