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Q1 2016: Private Companies are Major Acquirers in U.S.

2017-01-05 | 10pm

According to a new analysis in Evaluate Energy’s M&A Review for Q1 2016, there is huge impact on the upstream oil and gas industry which has affected most of the privately held companies of United States. Recently, there is a huge deal in the U.S. which comprises of two public companies. The Dominion Resources Inc. (NYSE:D) is all set to acquire Questar Corp. (NYSE:STR) for US$6 billion, whereas the next biggest deal includes a public company selling assets to a privately held acquirer. Hence, during Q1 2016, the U.S.-based private companies have been the acquirers in US$3.5 billion worth of asset as well as corporate deals. This is a significant amount as the total value of newly announced E&P deals which is made by all companies worldwide was only US$18.5 billion. During Q1 2016,  WPX Energy Inc. NYSE:WPX made the largest deal which includes a private acquirer for E&P assets in the U.S. and it was US$910 million sale.  The company has sold its Piceance Basin assets in Colorado and that too in an all-cash deal to minimize its substantial debt position, which is approximately US$3.1 billion by the end of 2015. The buyer was Terra Energy Partners LLC. The current production of its assets are approximately 500 mmcfe/d and cover 200,000 net acres. The sale will have great benefits on the future prospects of WPX as it will leave with its positions in the Delaware Basin, the Williston Basin and the San Juan Basin. Moreover, the company will pay more focus to move further. To strengthen its strategy to minimize debt, during this quarter the company has taken a major US$309 million gathering system midstream sale in the San Juan Basin. Terra Energy Partners LLC, who is the acquirer of WPX’s Piceance Basin assets, is mainly a private exploration and production company. The company has been formed with the perspective of acquisition and development of large, long-life producing oil and gas assets in North America. This company has its funding made by equity commitments from Kayne Private Energy Income Fund and Warburg Pincus. Covey Park Energy LLC with Dallas origin, has made significant announcement of US$420 million acquisition of EP Energy Corp.’s (NYSE:EPE) Haynesville and Bossier shale gas assets that are positioned mainly in Louisiana. This is another significant large private company deal. In the 2015 annual results, EP Energy has recorded approximately US$5 billion in long term debt. It seems that the deal has been done with the focus on minimizing this huge figure. There are some other multi-million deals which are made by the private acquirers in the U.S. are Chesapeake Energy Inc. (NYSE:CHK), Concho Resources Inc. (NYSE:CXO) and ConocoPhillips (NYSE:COP), have sell off assets in Q1 2016.  If you are interested to know more details on the largest private company deals in the United States, along with complete review of the biggest and major deals in the U.S., Canada and across the world, then you can check the Evaluate Energy’s review of global E&P deals for Q1 2016. .