Wed, Apr. 8, 7:59 AM
- Analysts at Jefferies now expect Royal Dutch Shell (RDS.A, RDS.B) to surpass Exxon Mobil (NYSE:XOM) as the world's largest publicly traded oil and gas producer by 2018, with output of 4.2M boe/day, following Shell's $69.6B deal to buy BG Group.
- But XOM has long been rumored as a potential bidder for BG, and Financial Times points out that it now has both the motive and the opportunity, raising the possibility that it could try to outbid Shell for BG.
- Like Shell, XOM is struggling to grow and will find it easier to raise production by dealmaking than by drilling; XOM’s output was ~4.3M boe/day in 2001 and 4M last year.
- With its greater size, low debt and AAA credit rating, XOM could muster a larger cash component in any offer than Shell’s 28% of its total offer of ₤13.50/share; however, hostile deals are very rare in the oil and gas industry.
- Whether or not BG is the perfect fit for XOM, Paul Sankey of Wolfe Research has suggested other midsized E&P specialists could prove tempting, including Hess (NYSE:HES), Continental Resources (NYSE:CLR), Devon Energy (NYSE:DVN), Apache (NYSE:APA) and Anadarko Petroleum (NYSE:APC).
Mon, Mar. 23, 6:26 PM
- EnLink Midstream Partners (NYSE:ENLK) agrees to acquire the Victoria Express Pipeline and related truck terminal and storage assets in a dropdown transaction from Devon Energy (NYSE:DVN) for total consideration of ~$210M.
- The deal includes $171M in cash, 338K ENLK common units and the assumption of $30M-$40M in certain construction costs to expand the system to full capacity.
- The pipeline, which became operational in Q3 2014, transports condensate from DeWitt County, Tex., to the Port of Victoria; current capacity is ~50K bbl/day, to be expanded to 90K bbl/day.
- ENLK says the transaction marks the first dropdown from DVN and expects such deals to play a significant role in its future growth.
Jul. 1, 2014, 2:52 PM
- Linn Energy’s (LINE +0.8%) $2.3B asset purchase from Devon Energy (DVN -0.1%) earns the praise of Raymond James analysts, who note that LINE plans to sell its high-decline Granite Wash assets to fund the deal, meaning the company is not likely to need to tap debt or equity markets for related funding.
- The firm estimates LINN may need to reserve only 20% of EBITDA to maintain the cash flow from the new assets vs. ~40% of EBITDA likely need to maintain the Granite Wash; through this transaction and the Permian divestiture program, LINN could reduce its overall capital budget by ~$400M.
- LNCO -0.3%.
Jun. 30, 2014, 9:12 AM
- Linn Energy (LINE, LNCO) agrees to acquire U.S. oil and gas properties from Devon Energy (DVN) for $2.3B.
- The assets currently produce ~275M cfe/day (~80% gas), with total proved reserves of 1.3T-1.5T cfe and total resource potential of ~3T cfe.
- The asset package is comprised of ~900K net acres across the Rockies, Mid-Continent, east Texas, north Louisiana and south Texas regions with ~4,500 total wells; LINN says it has identified 1K-plus future drilling locations and ~600 recompletion opportunities.
- LINN says the acquisition will be financed ultimately through the sale of its Granite Wash assets and other non-producing acreage in its portfolio.
- DVN says the deal covers remaining U.S. assets it had targeted for divestiture, and that the sale of Canadian and U.S. non-core properties over the past few months has generated $5B-plus in proceeds at an accretive multiple of nearly 7x 2013 EBITDA.
- LINE +0.3%, DVN +0.4% premarket.
May. 5, 2014, 5:42 PM
- Talisman Energy (TLM) and Statoil (STO) are considering selling their joint venture in the Eagle Ford basin, which could fetch more than $4B, Bloomberg reports.
- TLM is said to have solicited offers last year for its 50% interest in the JV and couldn’t find a buyer in part because STO wasn’t ready to exit.
- The report speculates that a sale could draw interest from large exploration companies such as Encana (ECA), Murphy Oil (MUR) and Devon Energy (DVN) that want to acquire more oil-producing properties.
Feb. 19, 2014, 6:58 AM
- Devon Energy (DVN) has agreed to sell some of its liquids-rich natural-gas assets in Canada and six natural-gas plants for $3.13B to Canadian Natural Resources (CNQ).
- Before royalties, the properties produced the equivalent of 383M cubic feet of natural gas per day, 10,800 bpd of light crude oil and 12,000 bpd of natural gas liquids.
- The transaction doesn't include Devon's Horn River interests in northern British Columbia and heavy oil assets in Alberta.
- The deal comes after Devon said in November that it planned to sell all of its Canadian gas assets following years of low prices. (PR)
Nov. 20, 2013, 5:30 PM
- Analysts say the $6B deal for GeoSouthern will give Devon Energy (DVN) a better balance between oil and natural gas.
- Canaccord says oil currently accounts for 12% of DVN's total volume, and the deal likely significantly increases DVN's oil production, as GeoSouthern is the fourth largest oil producer in the Eagle Ford.
- "The deal makes them more of an oil company and grows their production," says a Hodges Capital analyst. "A lot of people still have the idea that they are too much of a gas company and this deal will change that right away."
- The investor reaction to the deal was tempered by the high price paid, which Richard Zeits says sets a new record in the Eagle Ford play in terms of price paid per net undeveloped acre in a major transaction; the major beneficiary today was Penn Virginia (PVA), whose shares surged 4% thanks to its strong presence in the area.
Nov. 20, 2013, 9:16 AM
- Devon Energy (DVN) confirms it has reached a definitive agreement to acquire GeoSouthern Energy's Eagle Ford assets for $6B.
- The acquired assets include current production of 53K boe/day and 82K net acres with at least 1,200 undrilled locations.
- Estimated recoverable resource is 400M boe, mostly proved reserves, with the acreage position located in the best part of the play, as evidenced by the highest average initial production rates in the entire play and average estimated ultimate recoveries in DeWitt County exceeding 800K boe/well.
- DVN says the acquisition will be funded with a combination of cash on hand and borrowings.
- Shares +4.5% premarket after rising nearly 5% yesterday when WSJ first broke news of the deal.
Nov. 19, 2013, 2:33 PM
- Devon Energy (DVN +1.9%) reportedly is close to acquiring privately-held GeoSouthern Energy for ~$6B, and a deal could be announced as soon as tomorrow.
- GeoSouthern is a Texas-based oil and gas exploration company whose operations are focused in the Eagle Ford shale, which it helped pioneer.
Oct. 21, 2013, 2:51 PM
- "It's an epic deal," R.W. Baird analyst Ethan Bellamy says of plans to combine Devon's (DVN +4.2%) midstream operations with Crosstex (XTXI +59.4%; XTEX +37.7%) to form a publicly traded MLP that will combine the companies' pipelines, processing plants, rail terminals and other oil and natural gas infrastructure.
- "Devon is getting out of the gates on their midstream standalone business much bigger and stronger and potentially at investment-grade status right away," the analyst says, adding the combination also is "fantastic" for Crosstex.
- The Devon-Crosstex combo will be larger and more formidable than DVN's midstream assets would be in its own company; DVN expects the new business to bring $700M in earnings in 2014 vs. $425M it had expected via a standalone MLP.
Oct. 21, 2013, 9:14 AM
- Devon Energy (DVN), Crosstex Energy (XTXI) and Crosstex Energy LP (XTEX) agree to combine substantially all of Devon’s U.S. midstream assets with Crosstex’s assets to form a new midstream business consisting of two publicly traded entities: the general partner entity and an MLP.
- The combination of Devon’s and Crosstex’s midstream systems, including gathering and transportation pipelines, and processing, fractionation and logistics assets, will provide the new company with diversification and scale, along with an enhanced liquids-oriented growth profile.
- Assets are located in several of North America’s major oil and gas regions, including the Barnett Shale, Permian Basin, Cana and Arkoma Woodford, Eagle Ford, Haynesville, Gulf Coast, Utica and Marcellus.
- DVN +2.5% premarket.
May. 29, 2013, 11:12 AMNorthWestern Energy (NWE -1.3%) purchases the operating and non-operating natural gas production interests in northern Montana's Bear Paw Basin from Devon Energy (DVN -0.6%), including DVN's 82% interest in the Havre Pipeline Company. Estimated natural gas production from the acquisition will be approximately 5.6 BCF in 2013, or about 28% of NWE's current annual natural gas load in Montana. | Comment!
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