Author: Mark Young

U.S. producers expect 7% uptick in 2018 – new guidance data

Worldwide production by U.S.-based upstream public companies is set to increase by seven per cent in 2018, based on the latest guidance.

This is according to Evaluate Energy’s new North American guidance database, which holds guidance data for production, capex budgets and drilling plans for all U.S. and Canadian publicly listed companies. Click here for more on the data available.

So far, 80 public companies based in the U.S. have reported production guidance for 2018. Of that number, 58 companies expect volumes to grow year-over-year. The combined total is currently expected to reach 12.7 million boe/d – a significant uptick over 2017’s actual production of 11.8 million boe/d for the same group of companies.

In June, 20 of these 80 U.S.-based producers provided an update on their production guidance for 2018, accounting for 285,000 boe/d (32%) of the expected uptick.

19 of the 20 companies to provide new, updated or reaffirmed guidance for 2018 production expect to record an increase in output during 2018, compared to reported full-year averages in 2017.

The largest of these 19 increases was 74%, reported by Jagged Peak Energy Inc. Jagged Peak is a Permian-focused producer in the Delaware Basin. The company expects to see production average around 29,500 boe/d in 2018 on the back of a robust capital spending plan that includes a drilling and completion budget of between US$540-590 million and between 48-55 new gross wells brought online this year.
The only company of the 20 that expects a drop in production in 2018 is QEP Resources Inc. QEP’s latest guidance is just over 137,000 boe/d, a six per cent fall on the 146,000 boe/d recorded by the company in 2017. This drop is mainly due to the US$777.5 million sale of producing assets in Wyoming in September last year.

Source: Evaluate Energy North American Guidance

Evaluate Energy and CanOils now provide all upstream guidance for public companies across North America as part of the new guidance product. For a full demonstration click here.

Mexico energy reforms spur Pemex deals and outside investment

Falling production, rising debt and reduced reserve life were among the chief issues facing Pemex, Mexico’s national oil company. Historic reforms were introduced by Mexico’s government in 2013 to try and spark a significant reversal in performance of both Pemex and the country’s hydrocarbon production as a whole.

That is among the key findings of a new report published by the Daily Oil Bulletin, Sproule and Evaluate Energy. A fundamental goal of Mexico’s energy reforms, which began in 2013, was to drastically improve the fortunes of Pemex. Pemex is a key source of government income and the company faced challenging times in recent years:

  • Production dropped by 32% in the past 10 years
  • Proved reserve life1 halved between 2000-2016
  • Debt increased to almost $100 billion by the end of 2016

Aside from reducing the company’s heavy tax burden and pension liabilities, the reforms allow Pemex to pursue outside investment via joint ventures and to join consortiums bidding for new acreage.
Full details on the reforms are available in the report, which can be downloaded here.

Pemex has sought partners to create joint ventures on key development opportunities that previously it could not tackle alone. Encouragingly, it has now agreed to three deals worth a combined $1.2 billion in cash, cost carries and cost reimbursements.

At the end of 2016, Pemex also began participating in Mexico’s bid rounds for the first time. In the country’s first deepwater bid round (1.4), the company won one block in partnership with Chevron Corp. and Japan’s Inpex Corp. A few months later, Pemex secured two shallow water blocks, one in partnership with Colombia’s Ecopetrol and the other with Germany’s DEA Deutsche Erdoel AG, as part of the shallow water round 2.1. In early 2018, in the deepwater round 2.4 and the shallow water round 3.1, the company was awarded 11 further blocks. A handful of these were awarded to Pemex as the sole bidder while others saw Pemex win via more consortiums – providing Pemex with additional very experienced, successful and deep-pocketed international explorers as partners. The companies, along with the number of blocks Pemex will partner with them on, are listed below.

Source: “Mexico – How evolving energy reforms are driving foreign investment

The new report from Evaluate Energy, Sproule and the Daily Oil Bulletin also focuses on:

  • The main amendments to Mexico’s constitution, administrative agencies and regulatory systems
  • All winners and key trends in nine bid rounds to date
  • The recent success and challenges faced by neighbouring nations

Download the report at this link.

1) “Proved reserve life” is the number of years at current production levels it would take to deplete all proved reserves.

Bid rounds give both Mexico and Brazil strong starts to 2018

Successful bid rounds in Mexico and Brazil during Q1 secured $3.1 billion in cash – a huge step forward for both countries in securing global interest in offshore development.

Brazil 15th bid round in March was responsible for 79% of this value, with huge individual bids from ExxonMobil, Petrobras and Norway’s Statoil. Mexico’s deepwater Round 2.4 (January) and shallow water Round 3.1 (March) drew $649 million in cash bids combined.

A new report released by Evaluate Energy, Sproule and the Daily Oil Bulletin shows that while Brazil’s round drew larger cash bids, significant changes within Mexico’s oil and gas market are having a profound impact:

  • The $525 million generated in Round 2.4 was a huge step forward from Mexico’s seven previous rounds, where only a handful of blocks drew any kind of cash bid.
  • Both rounds drew keen interest from huge oil and gas companies that can invest anywhere in the world but chose Mexico’s high potential deepwater assets. The biggest winner among the companies involved in Round 2.4 was Royal Dutch Shell, a company with vast deepwater Gulf of Mexico experience and recent discoveries. Petronas, Total and Repsol were among the other key winners; and
  • All eight blocks on offer in the Southeast basin drew multiple bids in Round 3.1. Block 30, eventually won by Germany’s DEA Deutsche Erdoel AG, the U.K.’s Premier Oil and Malaysia’s Sapura E&P, was the most competitive and received seven separate bids.

Source: “Mexico – How evolving energy reforms are driving foreign investment

The main goals of Mexico’s energy reforms, which were instigated in 2013 and are detailed within the report, have been to inject competition into the upstream sector. It cannot be denied that this has been achieved so far.

The changes are also reshaping how Pemex, which has previously monopolised activity, operates within this altered marketplace. For sure, the company is still winning blocks ¬– four new blocks in Round 2.4, and seven new blocks in Round 3.1. But of the 11 blocks won by Pemex, nine were as part of a consortium and six were won by defeating a rival bid.

Full results and analysis of the key awards in all three rounds is available in the report, which can be downloaded here.

How Mexico is attracting major explorers to E&P projects

Nearly 70 companies ­have entered the fray since Mexico opened up its E&P market ­– among them Royal Dutch Shell, Petronas and Total.

The inaugural bidding rounds follow key constitutional reforms enacted in 2013 to end national oil company Pemex’s 75 year monopoly and accelerate investment in its untapped onshore and offshore areas. Competition in the sector is now rife, with international companies investing heavily in offshore areas in particular.

Details of the bids, the key players involved and the implications for Pemex are contained in a new report that examines the early impact of Mexico’s energy reforms. The report is authored by Evaluate Energy, Sproule and the Daily Oil Bulletin. The report is available at this link

The biggest early mover is Shell. It has secured the most new blocks (11 to date) among international companies. Nine of these were awarded in Round 2.4, which was held in January 2018 and focused on deepwater areas. Shell dominated that particular round, securing four of its new blocks with solo bids, and partnering with Pemex and Qatar Petroleum on others. Later, in March, Shell also secured a shallow water block in Round 3.1 with Pemex. No single international company is dominant in the sector.

Malaysia’s Petronas ranks just behind Shell with nine blocks and has focused on deepwater assets too. European producers Repsol and Total have collected a number of both shallow and deepwater blocks, while Italy’s Eni and the U.K.’s Premier Oil are the most active international companies in Mexico’s shallow water areas with interests in five blocks apiece.

Source: “Mexico: How evolving energy reforms are driving foreign investment” – download here


Shell has sold US$27 billion in assets since acquiring BG Group

Since agreeing the largest single upstream-centric deal of the past 10 years to purchase BG Group back in April 2015, Royal Dutch Shell has been selling assets all over the world to rationalize its portfolio.

Including this week’s US$750 million sale of an offshore shallow water gas field in Thailand, the company has now agreed sales of assets and business units for a grand total of just under US$27 billion between April 8, 2015 – the day the BG deal was first announced – and January 31, 2018.

According to data available in Evaluate Energy’s M&A database, Shell has been involved in 48 separate asset sales since the BG announcement, five of which were agreed for a value of over US$1 billion. From the Canadian oilsands to pipelines in the U.S. and chemical businesses in Saudi Arabia, the company’s sales have taken place all over the world and in a variety of business segments.

In terms of deal value, at US$9.4 billion it was Canada that saw the highest amount accumulated in asset or business unit sales by Shell since April 2015. The majority of this value revolves around the US$8.3 billion sale of a 60% stake in the Athabasca Oil Sands Project to Canadian Natural Resources in March last year. This is still the largest individual sale that Shell has made since acquiring BG.

The United States, where 11 Shell sales took place, saw the highest number of individual deals agreed, ahead of the UK with eight and Canada with five.

This US$27 billion is also probably just the tip of the iceberg; of the 48 individual divestitures Shell has agreed to since April 2015, the acquisition cost for 19 of them remained confidential. A number of these involved the kinds of assets that would normally change hands for sizeable sums, including the sale of stakes in an Iraqi oil field, a Chinese lubricants business and a Malaysian LNG export facility.

For more on Shell’s asset divestments and indeed any acquisitions made over the past 10 years, request a demonstration of Evaluate Energy’s M&A database at this link.

Top 5 Shell divestitures since April 8, 2015 by reported value 

Source: Evaluate Energy M&A Database

Notes to charts:

1) In deals with multiple countries or segments involved, a deal was assigned to a country and a business segment according to where the majority of the value was estimated to reside.
2) Deals were assigned to a time period based on the deal announcement date.
3) Deals in the midstream segment include deals for LNG, pipelines, storage, terminal assets and processing facilities. Deals in the downstream segment include deals for refineries, service stations, chemical production facilities and oil product marketing assets.

Why major investors are now being drawn to Mexico’s oil sector

Mexico’s abundant on-shore and offshore basins are now starting to attract significant independent and foreign investment.

Fuelled by Mexico’s energy reforms, enacted in 2014, 2017 saw more than $800 million in upstream deals agreed by state-controlled Pemex to form joint ventures on a handful of major projects. Several successful licensing rounds were also completed.

This sudden flood of activity means that only Brazil, Argentina and Colombia have seen more deals in pure dollar terms since 2014, according to a new report released in partnership by the Daily Oil Bulletin, Evaluate Energy and Sproule. Entitled Latin America: Assessing the impact of oil prices, energy reforms and national oil companies on deal activity, the report is available for download here.

Source: Latin America: Assessing the impact of oil prices, energy reforms and national oil companies on deal activity

The new report shows that while Brazil and Argentina lead by far with US$12.9 billion and US$7.8 billion in upstream sector deals since the start of 2014, respectively, Mexico is suddenly only slightly behind Colombia in fourth place in the rankings over the full four-year timeframe after this busy year of deals since the end of 2016. If the momentum achieved in 2017 continues, Mexico can expect significant additional investment over the next 11 months.

“Touted as having one of the best energy futures of any developing nation, Mexico has abundant untapped potential in both onshore and offshore basins, including virtually untouched unconventional resources,” said Jim Chisholm, report co-author and Vice President, Latin America, at Sproule.

“Since these reforms began, the country has been hard at work attracting foreign investment and continuing to build a robust regulatory and investment environment to support future growth.”

For more information on upstream M&A activity in Mexico, including details on the seven stages of license awards, Pemex’s US$800 million in joint arrangements and an overview of the licensing award schedule for 2018 and beyond, download the full report from the Daily Oil Bulletin, Evaluate Energy and Sproule at this link.

Follow Sproule on LinkedIn for the latest updates.

Why Canada saw C$42 billion in upstream deals in 2017 – and what this means for 2018

Canada’s upstream sector saw almost C$42 billion in new deals agreed in 2017 – a 91% increase over the five-year annual average – as a few massive oilsands deals offset a drop in overall deal-flow.

Source: CanOils M&A Database – deals are assigned to a year based on their announcement date.

2017 saw $32 billion in spent in three major oilsands deals, which comprised more than three-quarters of the year’s outlay for Canadian upstream assets.

“While 2017 saw the largest spend for a full calendar year since 2014, it’s hard to ignore the fact that a handful of oilsands acquisitions are far and away the key drivers here,” said Chris Wilson, Managing Director at CanOils. “Ignoring deal values, we saw that the number of Canadian upstream deals agreed, excluding land sales, was down by 20 in 2017 from 162 last year.”

The year ended quietly – with just C$117 million in new deals agreed in December according to data available in CanOils’ latest M&A report. There are reasons for optimism, however, heading into 2018.

“2017 was a relatively stable year for the oil price and in general M&A markets around the world have responded positively,” said Wilson.

“After the price downturn, the Canadian upstream sector is populated by companies that are typically much leaner now in terms of production costs and also much more stable in terms of balance sheets. This all seems to suggest that it will not be too long before we see a greater volume of deals being agreed for Canadian assets once again.”

A full rundown of 2017’s largest deals in Canada is available free in a new CanOils report focused on December activity. Click here to access it.

The Permian Basin is still the prime U.S. upstream acquisition target

The Permian Basin was the U.S. upstream sector’s top acquisition target for the fourth year in a row in 2017, according to new data from Evaluate Energy.

As part of a new report that analyses the key M&A trends around the world from the past 12 months, Evaluate Energy shows that the Permian Basin dominated M&A headlines in the U.S. sector with $26.4 billion in new deals announced. This total was almost $15 billion greater than the $10.9 billion in new deals seen in the Marcellus shale, the next most popular acquisition target in terms of dollars spent.

The full report is available for download here.

Source: Evaluate Energy M&A Review 2017, download here.

“While the Marcellus shale did have a big year, and also recorded the largest individual U.S. upstream deal of the year with EQT Corp. acquiring Rice Energy Inc. for US$8.2 billion, the activity here just doesn’t match up to the Permian,” said Eoin Coyne, lead author of the new report in his role as Senior M&A Analyst, Evaluate Energy.

The Permian doesn’t only stand out in terms of the U.S. domestic market, either.

The US$26.4 billion invested in new Permian Basin deals, while marginally lower than the US$27.1 billion recorded in 2016, means that the Permian accounted for 16% of the total value spent on upstream deals last year worldwide.

“The total spend in the basin did slightly decrease from last year, but it would be wrong to infer any waning of interest,” continued Coyne. “It is likely a combination of less distressed asset sales and a stronger oil price. Buyers and sellers have probably just found it harder to agree on a strike price. For the deals that have been agreed, we can see much higher values per acre in 2017 than a year before.”

More information and analysis on 2017’s M&A activity in the Permian Basin and across the U.S. can be found in the Evaluate Energy report, which is available for download at this link.

Floor of US$50 WTI expected to encouraged continued M&A activity in 2018

With $163 billion agreed in new upstream deals in 2017, Evaluate Energy’s latest report suggests that the recently improving oil price will encourage continued M&A spending around the world in 2018.

The full report is available to download here.

“Heading into 2018, the oil industry finds itself in a far healthier position than at this point two years ago, when the oil price was sub-$40 and OPEC remained firm in its stance to let the free market dictate the oil price,” said Eoin Coyne, lead author of the new report in his role as Senior M&A Analyst at Evaluate Energy.

“Since this time, there has been significant progress from industry in pushing down production costs, while the companies that survived have more stable balance sheets. With OPEC’s production cut extending to the end of 2018, we expect the oil price to have a supporting floor of $50 in the coming year,” added Coyne.

Oil companies at large have always used the current trading price of oil as the best barometer of how expansive to be in their investments. If the oil price behaves as expected, we can expect the 2018 total spend to match or improve upon the $163 billion reached in 2017.

Source: Evaluate Energy M&A Review, 2017

The Evaluate Energy report also provides insight on the companies that are best positioned to take advantage of deal opportunities in the coming year by looking at some key debt ratios.

“The ability to assume debt will continue to be a limiting factor with regard to how much is invested in M&A strategies,” added Coyne. “However, some of the world’s largest oil companies are in what we would describe as a “healthy” position, debt-wise, which should lead to another interesting year for upstream M&A in 2018.”

More information on the companies with the greatest ability to assume more debt, according to Evaluate Energy calculations, is available in the report, which can be downloaded here.

List of U.S. Oil & Gas Companies

There are 100s of upstream and downstream oil and gas companies based in the United States varying from large international players such as ExxonMobil and Chevron Corp., right down to small, single-play, domestic focused companies. The Evaluate Energy database provides coverage of every single publicly listed U.S. upstream and downstream oil and gas company, providing clients with all their production data, key financial performance metrics, M&A deals and much more.

Request a demo of Evaluate Energy at this link.


Click here to access our library of free, downloadable oil and gas reports.


List of U.S. oil and gas companies covered by Evaluate Energy

(lists correct as of Mar 31, 2018)


Integrated companies (upstream and downstream business units)

  • Chevron Corp.
  • ExxonMobil Corp.

Upstream companies

  • Abraxas Petroleum Corp.
  • Adams Resources & Energy Inc.
  • Amplify Energy Corp.
  • Anadarko Petroleum Corp.
  • Antero Resources Corp.
  • Apache Corp.
  • Approach Resources Inc.
  • Black Stone Minerals LP
  • Bonanza Creek Energy Inc.
  • Breitburn Energy Partners LP
  • Cabot Oil & Gas Corp.
  • California Resources Corp.
  • Callon Petroleum Co.
  • Camber Energy Inc.
  • Carrizo Oil & Gas Inc.
  • Centennial Resource Development Inc.
  • Chesapeak Energy Corp.
  • Cimarex Energy Co.
  • Citadel Exploration Inc.
  • CKX Lands Inc.
  • CNX Resources Corp.
  • Cobalt International Energy Inc.
  • Comstock Resources Inc.
  • Concho Resources Inc.
  • ConocoPhillips
  • Contango Oil & Gas Co.
  • Continental Resources Inc.
  • Daybreak Oil & Gas Inc.
  • Denbury Resources Inc.
  • Diamondback Energy Inc.
  • Dorchester Minerals LP
  • Earthstone Energy Inc.
  • Eclipse Resources Corp.
  • Energen Corp.
  • Energy XXI Gulf Coast Inc.
  • EOG Resources Inc.
  • EP Energy Corp.
  • EQT Corp.
  • ERHC Energy Inc.
  • Erin Energy Corp.
  • EV Energy Partners LP
  • Evolution Petroleum Corp.
  • EXCO Resources Inc.
  • Extraction Oil & Gas Inc.
  • FieldPoint Petroleum Corp.
  • Freeport-McMoRan Inc. (mining company with upstream oil and gas interests)
  • Genie Energy Ltd.
  • Goodrich Petroleum Corp.
  • GulfSlope Energy Inc.
  • Halcon Resources Corp.
  • HighPoint Resources Corp.
  • Hess Corp.
  • Houston American Energy Corp.
  • Isramco Inc.
  • Jagged Peak Energy Inc.
  • Jones Energy Inc.
  • Kimbell Royalty Partners LP
  • Kinder Morgan Inc. (midstream company with upstream interests)
  • Kosmos Energy Ltd.
  • Laredo Petroleum Inc.
  • Legacy Reserves LP
  • Lilis Energy Inc.
  • Linn Energy Inc.
  • Lonestar Resources US Inc.
  • Marathon Oil Corp.
  • Matador Resources Co.
  • Mexco Energy Corp.
  • Mid-Con Energy Partners LP
  • Midstates Petroleum Company Inc.
  • Murphy Oil Corp.
  • National Fuel Gas (midstream company with upstream interests)
  • Newfield Exploration Company
  • Noble Energy Inc.
  • Northern Oil & Gas Inc.
  • Oasis Petroleum Inc.
  • Occidental Petroleum Corp.
  • Panhandle Oil & Gas Inc.
  • Parsley Energy Inc.
  • PDC Energy Inc.
  • PEDEVCO Corp.
  • Penn Virginia Corp.
  • Petrolia Energy Corp.
  • PetroQuest Energy Inc.
  • Pioneer Natural Resources Co.
  • QEP Resources Inc.
  • Range Resources Corp.
  • Resolute Energy Corp.
  • Rex Energy Corp.
  • Ring Energy Inc.
  • Rosehill Resources Inc.
  • Royale Energy Inc.
  • RSP Permian Inc.
  • Sanchez Energy Corp.
  • SandRidge Energy Inc.
  • SilverBow Resources Inc.
  • SM Energy Co.
  • Southwestern Energy Co.
  • Spindletop Oil & Gas Co.
  • SRC Energy Inc.
  • Stone Energy Corp.
  • Tengasco Inc.
  • Tiger Oil and Energy Inc.
  • Titan Energy LLC
  • Torchlight Energy Resources Inc.
  • Transatlantic Petroleum Ltd.
  • T-Rex Oil Inc.
  • Ultra Petroleum Corp.
  • Unit Corp.
  • U.S. Energy Corp.
  • Vaalco Energy Inc.
  • Vanguard Natural Resources Inc.
  • Viper Energy Partners LP
  • W&T Offshore Inc.
  • West Texas Resources Inc.
  • Whiting Petroleum Corp.
  • WildHorse Resource Development Corp.
  • WPX Energy Inc.
  • Yuma Energy Inc.
  • Zion Oil & Gas Inc.

Downstream companies

  • Andeavor
  • Blue Dolphin Energy Co.
  • Calumet Specialty Product Partners LP
  • CVR Energy Inc.
  • Delek US Holdings
  • HollyFrontier Corp.
  • Marathon Petroleum Corp.
  • Par Pacific Holdings Inc.
  • PBF Energy Inc.
  • Phillips 66
  • Valero Energy Corp.


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