US oil and gas deals insights: Year-end 2017

A cautious close

Historically, the deal market ends the year on a positive note, as dealmakers rush to close transactions before the new year. However, the fourth quarter of 2017 ended not with a bang, but with a whimper, with deal value down by nearly half compared to the fourth quarter of 2016. 2017 started with a high level of optimism for deal-making in the oil and gas space, as investors’ tolerance for risk and appetite for deals increased. However, over the course of 2017, deals strategy and activity changed to right-sizing company portfolios and integrating prior acquisitions, as companies looked to funding key asset positions and divest non-core holdings.

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Key Trends and Highlights

  • Sixty-eight deals were announced in the fourth quarter of 2017, valued at $48.31 billion, an 11% uptick in the number of the announced deals relative to the fourth quarter of 2016, but a 47% decrease in the total deal value.
  • The fourth quarter’s soft performance meant a 10% decrease in total deal value, even with a 13% uptick in deal volume, compared to 2016.
  • Megadeals activity in the fourth quarter of 2017 was even lower than activity in the third quarter of 2017.
  • Twenty-eight of the 68 deals announced in the fourth quarter were shale-related.
  • The Gulf is back: after a year with no deals in the Gulf of Mexico, the fourth quarter of 2017 saw two transactions worth a combined total of $1.07 billion.


 

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Joe Dunleavy
PwC US Energy Deals Leader
Tel: +1 (713) 382 6638
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