Midstream transactions drove oil and gas deals in the second quarter
Oil and gas deals picked up in the second quarter of 2015 compared to the first, and it was high-dollar trading among pipeline and midstream companies that were the most active, according to an analysis by consulting group PwC.
Total oil and gas M&A activity was about in line with the historical average, and only down slightly from last year’s fast pace of second-quarter dealmaking — despite the common perception that oil and gas deals have been put on hold by fluctuating oil prices, said Doug Meier, PwC’s US energy sector deals leader.
During the second quarter, analysts at PwC tracked 47 oil and gas deals worth $50 million or more, for $38.8 billion total. That’s up from 39 deals worth $34.5 billion in the first quarter of this year and down not too far from last year’s second-quarter total of 65 deals worth $48.9 million.
Upstream deals among E&P have slowed significantly, Meier said, but the midstream sector has been more active than usual.
“It’s almost like a tale of two cites,” Meier said, “while E&P activity from both a value and volume perspective is at a trough, the midstream activity is doing very well.”
Nearly half of the second-quarter deals this year were made in the midstream sector. PwC analysts recorded 21 multi-million dollar transactions, totaling about $27.7 billion in value. Compared to the second quarter of last year, the number of deals increased by 110 percent and the total value grew by 130 percent.
Corporate transactions, which shifted whole companies, comprised the largest share of 2015 deals. PwC tracked 32 deals at or above $50 million with a collective price tag of $34.2 billion. There were 15 deals shifting assets on the quarter, totaling $4.6 billion.
Midstream companies provided some of the largest deals on the quarter, with PwC tracking three worth more than $1 billion. Overall, there were five $1 billion-plus deals, totaling $25.9 billion and 67 percent of total activity on the quarter.
Upstream transactions fell in the second quarter. PwC tracked 18 sales worth a total $8.3 billion, down 55 percent in number and 67 percent in value compared to the second quarter last year.
Oil field service deals similarly fell to four deals worth $1.6 billion, PwC said. That’s down 33 percent in number and 40 percent in value from the 2014 quarter.