Green power M&A: 48 GW of solar capacity changes hands

New data from Evaluate Energy shows that 48 GW in existing and future solar power generation capacity has changed hands in 271 M&A transactions around the world in 2020. Both figures are significant upticks on 2018 and 2019 activity in the sector.

The top 10 solar deals between January 1, 2020 and Feb 15, 2021 can be downloaded for free at this link.

“Much like we saw with the wind sector deals last week, the majority of the deals are for projects in progress and future capacity, rather than existing projects generating power right now,” says Eoin Coyne, Senior M&A Analyst at Evaluate Energy.

“Being part of the solar sector’s growth is clearly an attractive proposition for investors right now, what with new and bolder climate targets being set all the time by nations and corporations around the world.

“Even with the pandemic taking hold last year, major upticks were seen in deal counts especially for solar sector deals and a further 14 GW in solar generation capacity was dealt for in 2020 compared to 2019.

“This all stands in stark contrast to oil and gas markets, where, as our recent analysis showed, the pandemic was responsible for a sharp downturn in activity across the board.”

As for 2021 activity so far, Evaluate Energy data shows that solar sector deal counts are currently on pace to overtake 2020 figures very quickly, with 56 deals agreed up to and including February 15.

This count includes two major deals in the U.S. for 10 GW and 8 GW in future capacity, respectively.

These two deals rank as the two largest deals by generation capacity acquired in our top 10 solar sector deals between January 1, 2020 and February 15, 2021. More on these 10 deals is available for free download at this link.

This analysis was created using the Evaluate Energy M&A database, which began including green power and renewable energy sector transactions in 2016. Find out more here.

Green power M&A: 74 GW of wind capacity changes hands

New data from Evaluate Energy shows that 74 GW in existing and future wind power generation capacity has changed hands in 222 M&A transactions around the world in 2020. Both figures are significant upticks on 2018 and 2019 activity in the sector.

The top 10 wind deals between January 1, 2020 and Feb 15, 2021 can be downloaded for free at this link.

“The majority of the deals are for projects in progress and future capacity, rather than existing projects generating power right now,” says Eoin Coyne, Senior M&A Analyst at Evaluate Energy.

“With new and bolder climate targets being set all the time by nations and corporations around the world, being part of the wind sector’s growth is clearly an attractive prospect for acquirers and investors alike right now.

“A clear appetite is growing for the wind sector, with upticks in deal counts and the power generation capacity involved in M&A deals growing year-over-year between 2018 and the end of 2020, even with the pandemic taking hold last year.

“This wind sector’s deal activity over the past year stands in stark contrast to oil and gas markets, where, as our recent analysis showed, the pandemic was responsible for a sharp downturn in activity across the board.”

As for 2021 activity so far, Evaluate Energy data shows that wind sector deal counts are currently on pace to match 2020 figures at this very early stage. The deals have so far been for typically smaller assets, however, with just 1.75 GW acquired up to and including February 15.

The top 10 wind sector deals ranked on generation capacity between January 1, 2020 and February 15, 2021 were responsible for 44% of the total capacity acquired over the same timeframe. Details on these deals is available for free download at this link.

This analysis was created using the Evaluate Energy M&A database, which began including green power and renewable energy sector transactions in 2016. Find out more here.

MEG Energy delivers top Q3 netback among oil-weighted producers in North America

New data from Evaluate Energy shows that MEG Energy’s oilsands operations generate the highest overall operating netback per barrel among North America’s most heavily oil-weighted producers.

This analysis was conducted using publicly listed producers in Canada and the United States.

Data on the Top 5 netbacks recorded by oil-heavy and natural gas-heavy producers in Q3 2020 is available here.

“MEG ranks highly in the group because it only produces oil. It has no lower-margin natural gas sales weighing down its revenues, much like most of the companies here in the top 5 oil producers,” said Mark Young, Senior Analyst at Evaluate Energy.

“At just $2/boe back from MEG in Q3 netbacks, one could argue that Pioneer has the ‘best’ netback of the group, as it is only 80% weighted towards oil production,” Young continued. “Every other company in the top 5 oil producers is weighted at least 89% towards oil.”

To download the data, click here.

On the gas-heavy side, it was a similar story.

Three Canadians ranked highly, with netbacks of almost $9.00/boe recorded by Birchcliff Energy, Tourmaline Oil and ARC Resources, but it was one of the American contingent here that stands out.

“Comstock Resources’ $7.46 operating netback per boe is extremely noteworthy from the gas producers,” he said. “The other high ranking gas producers all had a portfolio made up of over 20% oil and liquids in Q3, while Comstock is almost exclusively (98%) a natural gas producer which would limit its revenues per boe relative to the rest of the group.”

Comstock’s low production costs played a large role in generating the relatively high netback. For more on these costs, read our article from last week via the Daily Oil Bulletin.

2020 Upstream Deals Reach “Almost Unthinkable” Total of $93 billion

Evaluate Energy’s new M&A report shows that $93 billion in upstream oil and gas deals were agreed in 2020, with the bulk of the sum found in low-premium corporate mergers in North America agreed in the latter period of the year.

The full report, which looks at all major deals and investment trends across a remarkably turbulent year for the oil and gas industry, is available for free download at this link.

Total 2020 deal values dropped 48% on the $180 billion secured in 2019 – making it the lowest annual spend since 2015. What may be more surprising is that it got as high as $93 billion by year’s end.

“While it is easy to focus on the relatively low value and equally low deal counts, getting anywhere approaching a total of $100 billion seemed almost unthinkable in the early stages of the pandemic,” said report author Eoin Coyne, Senior M&A Analyst at Evaluate Energy.

“Take Q2 for instance; when demand was being destroyed and oil temporarily traded at a negative value, the deal total for that three-month stretch stood at just $4 billion.”

This year’s annual upstream M&A review from Evaluate Energy analyses the major deals from 2020, including:

  • Acquisitions by Chevron, ConocoPhillips and Devon Energy in the U.S.
  • The major Canadian oilsands deal that saw Cenovus Energy merge with Husky Energy
  • A multi-billion reverse-takeover arrangement in the U.K. North Sea
  • The recent asset sale in West Africa by France’s Total

 

U.S. and Canada dominate upstream sector deals in Q4 2020

Deals in the United States and Canada were responsible for around 84% of the $93 billion in upstream deals agreed worldwide in Q4 2020, according to the latest data from Evaluate Energy.

A list of the top 10 countries, ranked by value of Q4 E&P deal activity, and details on the largest deal to be agreed last quarter in each country, is available for free download at this link.

For our full review of all 2020 M&A activity, download Evaluate Energy’s latest M&A report at this link.

“Canada made up 25% of all North American deals thanks primarily to the major oilsands merger of Cenovus Energy and Husky Energy and a handful of lower-value corporate acquisitions by Whitecap Resources and Tourmaline Oil,” said Eoin Coyne, Senior M&A Analyst at Evaluate Energy. “This was the first time Canada accounted for more than 20% of both North American deal totals and global deal totals since Q2 2018.”

The United Kingdom, thanks almost entirely to a reverse takeover agreement that will see Chrysaor Holdings merge with Premier Oil Plc, was the only other country to see over $1 billion in new deals agreed. Colombia, Egypt, Israel and Russia also made the top 10 list.

The full top 10 ranking is available for download at this link. The data shows the total value of all upstream deals agreed in the top 10 countries. The top individual deal for each country is also included.

Evaluate Energy is headquartered in London and specializes in global oil, gas and renewable energy intelligence.

Q4 upstream deals reach US$43 billion – but don’t let the numbers fool you

Five multi-billion-dollar deals made Q4 2020 one of the highest value quarters for upstream M&A in recent memory, totaling US$43 billion based on new research from Evaluate Energy.

ConocoPhillips, Pioneer Natural Resources and Diamondback Energy all made huge moves towards the end of a year of turmoil for oil and gas. Recent pricing stability and indications of increased capital expenditure in 2021 are providing some relief for embattled producers and suppliers.

The full Q4 M&A deals list is in Excel format for free download

Our M&A report for the full year 2020 is available for download now too.

“Deal activity had begun to pick up in Q3, especially in North America, having dried up almost entirely after March in the upstream sector,” said Eoin Coyne, Senior M&A Analyst at Evaluate Energy in London. “That late Q3 period saw a series of friendly, low-premium mergers agreed. This trend continued strongly in Q4 to boost overall industry spending.”

The fourth quarter saw the largest Canadian deal of the year agreed: Cenovus Energy’s merger with fellow oilsands producer Husky Energy.

“The quarter saw $43 billion in new E&P deals around the world,” added Coyne. “At first blush this looks like a major uptick in activity, even going back a few years. The top 10 deals, however, made up 88% of the total quarter value by themselves, meaning that Q4 only really saw an uptick in spending, rather than deal-making activity in general.”

The full list of top 10 deals includes data on acquisition costs and how much equity, if any, was included in agreed payment structures. The data also shows how much production was involved in each deal. Download it here.

Evaluate Energy is headquartered in London and specializes in global oil, gas and renewable energy intelligence. It is a sister brand of the Daily Oil Bulletin.

 

New data: Canada prominent in decade’s Top 10 E&P oil and gas deals

Three Canadian upstream M&A deals rank in the 10 largest E&P transactions by acquisition value around the world in the past decade, according to new data from Evaluate Energy.

U.S., Russian deals also appear prominently alongside the largest deal of the decade, Shell’s acquisition of BG that included assets from all over the world.

Click here for a free Excel download of the full Top 10 deal list.

“Despite 2020 being a down year for many in the upstream space to say the least, it was also interesting to see a couple of 2020’s corporate mergers in the United States break into the top 10,” said Eoin Coyne, senior M&A Analyst at Evaluate Energy. “ConocoPhillips’ – who make the list as both an acquirer and a target in two separate high value deals – and Chevron’s recent mergers with Concho Resources and Noble Energy, respectively, were the deals that made the cut.

“The other high-profile, high-value mergers from last year ranked just outside the top 10, including Cenovus Energy’s acquisition of Husky Energy, and Devon Energy’s acquisition of WPX in the U.S.”

Canada’s three deals made up 16% of the combined $296 billion value of all 10 deals. CNOOC Ltd.’s acquisition of Nexen in 2012 is the largest Canadian deal over the past 10 years. At a value of ~US$18 billion, this deal ranks fourth in total value on a global scale.

The full list of the top 10 deals, which includes data on acquisition costs, details on how much equity was involved in the deal and how the value of that equity increased or decreased between announcement and deal completion, can be downloaded here.

Evaluate Energy is headquartered in London and specializes in global oil, gas and renewable energy intelligence.

 

France top M&A target for European wind power deals

Fresh analysis from Evaluate Energy’s M&A team shows that France currently leads a busy European market in 2020 focused on wind power sector mergers and acquisitions.

Evaluate Energy renewable energy deal data shows that, so far, Europe has seen 100 deals agreed for wind power assets in 2020. France accounts for one fifth of activity. The U.K. ranks just behind with 16 deals corporate mergers or asset acquisitions, followed by Germany, Sweden and Norway.

Source: Evaluate Energy M&A

France also leads other European nations in terms of the power generation capacity involved in this year’s wind power deals. So far this year, France has seen deals for stakes in over 5.6 GW of wind projects. Only 10% of this value was comprised of existing, producing projects, with the bulk of deals focused on projects under development.

Source: Evaluate Energy M&A

“The U.K. and Sweden have similar profiles to French activity when it comes to deal-making in the wind sector,” said Eoin Coyne, Evaluate Energy’s lead M&A analyst. “Most of 2020’s deals were made for projects under development.”

“In contrast, Spain – which is by far Europe’s leader when it comes to solar power deals in 2020 – and Portugal also rank highly here when it comes to wind power capacity changing hands, but the majority of this capacity in both nations is already producing,” he continued. “Germany ranked highly on deal count but does not appear in this capacity ranking as the deals there were all for small scale projects, relatively speaking.”

In terms of key developments for the sector at large, Coyne pointed to the activity of one of the traditional oil and gas supermajors as something to keep a close eye on.

“Looking at the more high-profile activity through the lens of the ‘energy transition’ here, it is interesting to see Total’s involvement in the European wind sector,” he said. “Our data shows that Total has been involved in deals including 1.6GW of future production capacity in France and the U.K. in 2020 and was the only traditional oil major to really make any significant impact on the M&A market for European wind power at all this year.”

“Total also played a large part in Spain’s 8.0 GW of solar power sector deals this year, acquiring a 1.2GW project portfolio in September,” he concluded.

Evaluate Energy’s M&A database includes data on every deal made in the global power and wider energy sectors.

 

M&A Q3 2020 – Canada sees resurgence in upstream deals

Canadian upstream activity sprung to life in Q3 with a series of deals agreed involving ConocoPhillips, Canadian Natural Resources and Whitecap Resources, based on Evaluate Energy’s latest M&A report, available here.

Overall spend in Canada exceeded $900 million and could have been even higher if Obsidian’s rejected approach to merge with Bonterra had been successful.

These values signal a sharp increase on previous quarters but lag historic averages and obviously pale in comparison to the Cenovus-Husky mega deal agreed recently to kick off Q4.

“In the first six months of 2020, the largest individual E&P deal to be agreed in Canada saw Spartan Delta Corp. acquire Bellatrix Exploration’s assets via a bankruptcy process for around US$77 million,” said Eoin Coyne, Senior Analyst at Evaluate Energy and report author.

“In total, the Canadian upstream space had recorded just over $350 million in new deals by the end of June.


Source: Evaluate Energy Q3 M&A Report

“Canada’s recovery in the third quarter was mirrored by the wider oil market and global economy in that substantial recoveries have taken place since full lockdowns were lifted. It must be noted, however, that even with the huge Cenovus-Husky deal being agreed in early Q4, activity levels remain relatively muted in the Canadian market as a whole, compared to levels of M&A activity seen in years past.”

The full Evaluate Energy report, released again in partnership with Deloitte, is available to download here.

Major Canadian deals agreed in Q3:

  • ConocoPhillips acquires Montney acreage from Kelt Exploration: ConocoPhillips reaffirmed that Canadian oil and gas remains an ongoing part of its strategy with a US$390 million purchase of liquids-rich Montney acreage from Kelt. Kelt will look to pay off all debt with the cash generated.
  • Canadian Natural Resources acquires Painted Pony Energy: CNRL acquired Painted Pony Energy Ltd. for US$344 million – a value that includes roughly US$261 million in Painted Pony debt that was present on its most recently released balance sheet. Painted Pony’s production is heavily gas weighted, bringing a greater level of diversification to CNRL’s portfolio.
  • Whitecap Resources acquires NAL Resources from Manulife: Whitecap Resources acquired NAL Resources from Manulife Financial Corp. in an all-stock deal worth $110 million. All-stock deals and corporate takeovers more akin to friendly mergers were a key feature of Q3 deals globally.

Evaluate Energy’s latest M&A report includes analysis on all major deals agreed this quarter. It includes details of acquisitions agreed in the U.S. with very friendly merger terms, plus analysis on an interesting cash generating arrangement for Antero Resources in West Virginia and an overview of recent West African deals involving Total, Woodside and Cairn Energy.

 

M&A Q3 2020 – Financial squeeze prompts U.S. oil company consolidation

Weak demand related to COVID-19 is hurting company finances and resulted in a series of U.S. upstream deals much more akin to friendly mergers than aggressive takeovers.

That is a key takeaway from Evaluate Energy’s latest M&A report – available to download here – that analyses all major upstream deals globally in Q3 2020.

The third quarter saw $24 billion in deals – a significant uptick on the historic low of just $4 billion recorded in Q2. Friendly U.S. mergers, or mergers of equals, featured heavily.

Source: Evaluate Energy Q3 M&A Report

“These mergers are characterized by acquisitions where the share premium is either non-existent or is far lower than the usual level required to convince target company shareholders to part with shares,” said Eoin Coyne, Senior Analyst at Evaluate Energy and report author.

“The drop in oil demand and price has strained company finances and pushed some into viewing the safe harbour of a larger, better leveraged company as the best option.”

The Evaluate Energy report, released again in partnership with Deloitte, examines three recent U.S. deals in particular:

  • The proposed acquisition of Montage Resources by Southwestern Energy that will be conducted at a discount of the day-prior trading price;
  • The consideration for Devon Energy’s acquisition of WPX Energy represents a premium of just 3%; and
  • The quarter’s largest deal that saw Chevron acquire Noble Energy at just an 8% premium

“This industry consolidation is a trend that is likely to continue should the oil price remain below the break-even level required by many producers,” added Coyne.

Evaluate Energy’s latest M&A report includes analysis on all major deals agreed this quarter. The report includes details on a major increase in Canadian activity, analysis on an interesting cash generating arrangement for Antero Resources in West Virginia, and an overview of recent West African deals involving Total, Woodside and Cairn Energy.