Oil and gas M&A deal-making in the second quarter of 2021 continued to bounce back from year-ago levels amid a tidal wave of corporate consolidation, according to S&P Global Market Intelligence data.
The industry announced 40 more whole-company and minority-stake deals in second-quarter 2021 than in the second quarter of 2020: 108 deals compared to 68. In the same period, the combined value of deals surged from $1.88 billion to $41.62 billion. The number of announced asset transactions rose from 77 to 123, and their aggregate value climbed nearly $12 billion to $14.04 billion.
Pembina Pipeline Corp.’s $12.7 billion bid for fellow Canadian midstream operator Inter Pipeline Ltd. was the biggest deal announced during the period. Pembina, which is competing against a hostile takeover offer for Inter Pipeline proposed by Brookfield Infrastructure Partners LP, recently secured a win when Alberta regulators shot down Brookfield’s efforts to have the transaction terminated. Inter Pipeline’s shareholder rights plan will now remain in place until after the company’s July 29 shareholder meeting, when the vote on the deal will be held and will prohibit Brookfield from acquiring more than 20% of Inter Pipeline’s shares.
June also saw Appalachian oil and gas producer Southwestern Energy Co. agree to buy Haynesville driller Indigo Natural Resources LLC for $3.05 billion. The deal is expected to add more than 1,000 locations to Southwestern Energy’s dry gas inventory and increase the company’s net production to over 4 Bcfe/d, about 85% of which is natural gas.
“The strategic transportation capacity allows production to flow from the wellhead to the inlet of several LNG pipeline intake facilities and other interstate pipelines that serve industrial markets in Louisiana,” Southwestern President and CEO William Way said on a June 2 conference call.
“It’s a very logical move for us being a leading natural gas company to focus on the two leading natural gas basins in the United States.”
The biggest North American asset-level transaction announced during June was Plains All American Pipeline LP’s $850 million sale of its Pine Prairie and Southern Pines natural gas storage facilities to Oaktree Capital Management LP-backed Hartree Partners LP. The assets included in the deal comprise about 70 Bcf of total working gas capacity across nine caverns, along with related base gas, header pipelines and compression facilities.
Source: Platts