A&D Intelligence

Houston’s Scotia Waterous co-head and managing director Adrian Goodisman provided a snapshot of M&A in the Gulf of Mexico at an IPAA event during the Offshore Technology Conference. Here’s a summary:

Total transaction values increased steadily through 2006 at $11 billion in total deal values with a slight pullback in ‘07 to $9B. YTD08 looks strong at $4B through four months, bolstered by two big deals. The first was between Japan’s Knoc and Samsung currently buying most of New Orleans’ Taylor Energy’s assets, and Stone Energy in April buying Bois d’Arc Energy. Scotia, by the way, is doing both deals.

Current production metrics are reflected in these two deals, almost double YTD over last year. Production valuation for 2007 ended up at $45,800/boe/d for oil and $35,500 for gas, compared with $85,500/boe/d for oil and and $93,800 for gas year-to-date 2008.

Interestly, the number of deals has been steadily dropping since 2005 while the total deal values stay strong.  Reserve valuations in 2004 for were $1.57/Mcfe compared with $5.81 YTD08; for gas, $1.85/Mcfe with $5.42 today.

Who’s buying? In the deepwater, the past three years have been dominated by European players with a little Asian and nil North American. This year so far the Asians hold all of the assets. On the shelf, North American buyers have been most active the past couple of years; this year Stone holds two-thirds while Knoc holds the other third.

For more detail on Goodisman’s presentation, click here: Gulf of Mexico Market Update

The question remains: Who’s grabbing all the lease blocks? Stay tuned.

Steve Toon, Editor, A&D Watch; Contributing Editor, Oil and Gas Investor; www.OilandGasInvestor.com; stoon@hartenergy.com

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