In a relatively stable year for the oil and gas industry, overall M&A spend – based on deals announced – in the upstream sector reached $163 billion during 2017, according to a new report released today by Evaluate Energy.
The full report is available for download here and provides insight and analysis on all the key deals of the year around the world.
This total of $163 billion in new upstream sector deals is 17% higher than the $139 billion reached during 2016 and is also the highest annual outlay since 2014, the year the oil price first dropped in this current cycle.
Canada's major oilsands transactions of 2017 feature prominently in the list of biggest deals by value, with Cenovus Energy's buy from ConocoPhillips at number two overall, followed by Canadian Natural Resources' acquisition from Royal Dutch Shell at number three.
Value was up last year, and so was the number of deal counts.
“Upstream deal values were high in 2017 compared to recent years, but the data also shows a real increase in underlying activity this year. The number of what we refer to as ‘significant’ deals – those with a value of over $10 million – was up by 10% from 2016,” said Eoin Coyne, lead author of the new report in his role as senior M&A analyst at Evaluate Energy.
The oil price has been the key driver behind this increased activity in what has been the strongest year for the average price since 2014. In 2017, the WTI price averaged $50.80, which is 17% higher than the 2016 average of $43.29.
The outlook for activity in the coming year is equally bright.
“The WTI price hasn’t closed below $50 for more than three months and is currently trading in excess of $60, which all bodes well for market stability,” added Coyne. “Also, OPEC has extended its support for the oil price by extending its production cut to the end of 2018.”
For more on all the key deal trends in the upstream sector in 2017, download the full report here. The report includes detailed overviews of the largest deals in North America, Europe and Latin America.