The number of announced whole-company and minority-stake deals in the oil and gas industry fell to 24 in May 2023 from 37 in the same month of 2022.
Despite the smaller number of deals, the combined value of the May 2023 transactions was $30.33 billion, nearly fivefold the $6.29 billion in the same month of 2022, according to S&P Global Market Intelligence data.
Only nine asset transactions were announced in the sector in the month, but they totaled $4.55 billion. In May 2022, 33 asset deals with an aggregate value of $2.85 billion were announced.
Largest whole-company, minority-stake deals in May
Three whole-company and minority-stake acquisitions announced in May were valued at more than $2 billion.
The largest deal of the month, and the largest deal in the year so far, was Oneok Inc.'s $18.83 billion acquisition of Magellan Midstream Partners LP, which is more than quadruple the value of April's largest deal. The merger between the two midstream companies will give Oneok — primarily a transporter of natural gas liquids and natural gas — access to Magellan's refined products and crude oil transportation business, which includes the longest refined products pipeline system in the US.
The second-largest deal of the month was Chevron Corp.'s $7.72 billion purchase of PDC Energy Inc. The deal will increase Chevron's proved reserves 10% for under $7 per barrel of oil equivalent while adding 275,000 net acres and reserves of 1 billion barrels of oil equivalent in the Denver-Julesburg play. The deal also will add 25,000 net acres in the Permian Basin that Chevron will integrate with its existing operations.
HF Sinclair Corp. will acquire the remaining 52.8% stake of Holly Energy Partners LP for $2.72 billion, exchanging 0.3714 shares of its stock for each outstanding share of Holly Energy Partners.
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Largest asset deals in May
The sector announced two asset deals in May valued at $1 billion and up.
The largest asset deal of May and the year so far is ConocoPhillips's purchase of the remaining 50% stake in the Surmont oil sands project from Total E&P Canada Ltd. for $3.26 billion. The decision to fully own the project is a good move for the US major because it will add $600 million in 2024 cash flows in exchange for $100 million in capital spending, Wall Street analysts said.
The second largest asset deal of the month is Air Products & Chemicals Inc.'s buyout of a natural gas-to-syngas processing facility in Uzbekistan's Qashqadaryo province from Uzbekistan GTL LLC and JSC Uzbekneftegaz for $1 billion. Air Products will own and operate two large-scale air separation units, two large-scale auto-thermal reforming units, and a hydrogen production unit within the Uzbekistan GTL complex.
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