S&P Global Market Intelligence presents In Play Today, a periodic summary of potential deal activity in the energy sector. This summary is based on information obtained by S&P Global Market Intelligence and may not be inclusive of all potential deal activity. Send comments and news leads to Darren.Sweeney@spglobal.com.
Power
NextEra Energy Inc. continues to be an active player in the utility sector with reports surfacing in the past few months about the company's interest in potential tie-ups with Duke Energy Corp. and Evergy Inc. Both companies have reportedly rebuffed the takeover attempts. A potential merger with Duke Energy would create a "mega-utility" with a market capitalization north of $200 billion. NextEra's offer for Evergy was reported as a $15 billion all-stock bid.
Exelon Corp., meanwhile, is mulling the potential separation of its unregulated Exelon Generation Co. LLC business as part of a strategic review of the company's corporate structure.
Public Service Enterprise Group Inc. is looking to reduce "overall earnings volatility" by exploring strategic alternatives for PSEG Power LLC's non-nuclear generation fleet and the PSEG Solar Source LLC portfolio. PSEG expects to receive nonbinding bids in the first quarter of 2021, followed by final bids in the second quarter of 2021.
PPL Corp. in August launched a formal sale process for U.K. utility Western Power Distribution PLC with several utilities and asset managers in North America and Europe expressing interest. There potential also exists for utilities with a U.S. presence to swap assets in the deal. At least one report, however, suggested the planned sale could face delays from policy uncertainty related to Britain's exit from the European Union.
American Electric Power Co. Inc. is evaluating whether to sell certain underperforming assets or utilities to fund the $2 billion acquisition of three wind projects in Oklahoma from developer Invenergy LLC.
Natural gas
Centrica PLC is reportedly seeking to sell its LNG portfolio in response to volatile fuel prices.
Oil and gas producer Ovintiv Inc. is believed to be considering divesting its Eagle Ford shale assets in Texas in a deal that could be valued at between $600 million and $700 million.
CenterPoint Energy Inc. in November unveiled plans to sell its Arkansas and Oklahoma natural gas utilities to help fund a $3 billion increase to its 2021-2025 capital spending. The planned sale is viewed as a test of the gas sector's sleepy M&A market.
At a Dec. 7 investor day, CenterPoint executives said the company "will not be rushed" on evaluating its stake in Enable Midstream Partners with an update promised within the next 60 days. In November, Enable Midstream President and CEO Rod Sailor downplayed reports that sponsors CenterPoint and OGE Energy Corp. intended to sell the pipeline company.
Exxon Mobil Corp. is looking at ramping up its upstream asset sales in 2021, executives said on an Oct. 30 earnings call. The potential acceleration of Exxon's $15 billion to $25 billion divestment plan comes as the company considers writing down as much as $30 billion in natural gas holdings in the U.S. and Canada.
Leading natural gas producer EQT Corp. has been reported as having interest in acquiring rival CNX Resources Corp. EQT in October agreed to buy Chevron Corp. upstream and midstream assets in the Appalachian Basin for $735 million.
Coal
Coal producer Arch Resources Inc. in October outlined plans to expedite its exit from the Powder River Basin and wind down its thermal coal segment amid a pivot to the metallurgical market. The move comes after a federal court upheld the Federal Trade Commission's decision to block a Peabody Energy Corp. and Arch Resources joint venture of certain Powder River Basin and Colorado assets.
Oil
Occidental Petroleum Corp. management said on a Nov. 10 earnings call that the company expects to meet the lower end of its planned $10 billion to $15 billion divestiture target. Occidental President and CEO Vicki Hollub said the upstream oil and gas segment is facing "the worst market for asset divestitures in the history of our industry."
In early November, a report surfaced that Total SE is planning to sell its stakes in oilfields located offshore Angola as the company focuses on its larger and more profitable oil and gas fields in the region. The oil and gas major could reportedly raise about $300 million by selling its 20% stake in Block 14.
CVR Energy Inc. executives said on a Nov. 3 earnings call that the inland crude oil refiner is weighing options to diversify its business, including entering the renewable diesel market. These options also include expanding the company's refining footprint through acquisitions.
Suncor Energy Inc., Canada's largest oil company by revenue, is considering the sale of stakes and assets in certain North Sea oil and gas fields, according to a late October report. While Suncor has not begun the formal sales process, the company has engaged potential buyers interested in assets on the U.K. and Norwegian side of the North Sea, the report notes.
After reports surfaced in September that U.K. oil producers Chrysaor Holdings Ltd. and Premier Oil PLC held talks about a potential business combination, the companies on Oct. 6 announced an all-share merger through a reverse takeover that would eliminate about $2.7 billion of Premier's debt. The deal is expected to close by the end of the first quarter of 2021.
Updates
PSEG announced Dec. 4 it has reached a deal to buy a 25% stake in the 1,100-MW Ocean Offshore Wind Farm in New Jersey from Ørsted North America, a subsidiary of Denmark's Ørsted A/S. Terms of the transaction were not disclosed. The offshore wind project is expected to begin operation in late 2024.
Exxon confirmed Nov. 30 that it is calling off the planned sale of the Gippsland Basin oil and natural gas development in Australia's Bass Strait after an extensive market evaluation.
Orange, Conn.-headquartered utility Avangrid Inc., once believed to be seeking a combination with PPL, on Oct. 21 announced plans to acquire Albuquerque, N.M.-headquartered PNM Resources Inc. in a $4.32 billion cash deal.