Monthly M&A Recap: August Deal Flow Remains Depressed, U.S. Election Uncertainty Looms
International upstream oil & gas deal activity continued to decline in August as a result of the ongoing Covid-19 pandemic, even as global crude oil benchmarks remained range-bound between US$43-45 a barrel.
According to data shared in Finbrook’s Monthly M&A Recap for the month of August, only 57 new deals, worth approximately US$2.1 billion in aggregate, were announced during the month, compared with an average deal count of 76 deals per month during H1-2020, and an average of 134 deals per month in H2-2019.
Southwestern Energy’s all-stock offer to acquire Montage Resources for over US$980 million (including debt) accounted for nearly half of aggregate deal value during the month, and followed the announcement of several other Appalachia-focused deals in the U.S. over the past two months.
Other significant deals announced in August included:
• Canadian Natural’s acquisition of B.C. Montney-focused Painted Pony Energy for ~CAD 461 million
• Whitecap’s all-stock offer to acquire Canadian producer NAL Resources from Manulife for ~CAD $155 million
• Woodside’s pre-emption of Lukoil’s offer to purchase Cairn’s 40% non-operated interest in the RSSD Blocks, offshore Senegal, for US$300 million
Industry analysts expect deal flow to remain muted for the remainder of Q3 and the beginning of Q4, as a second wave of Covid-19 infections hits countries around the world, and financial and commodity markets remain susceptible to increasing volatility in the period leading up to the U.S. presidential election in November.
Click here to access the summary report.