US oil and gas deals increase in Q2

Mainly mergers and acquisitions were on the rise

Deal activity in the midstream sector during 2014 saw a dramatic slowdown.
Deal activity in the midstream sector during 2014 saw a dramatic slowdown.

The US saw an increase in the number of oil and gas deals in the second quarter of 2015 as companies adapt to the lower oil price environment, according to PwC.

In total, mergers and acquisitions (M&A) in the oil and gas industry increased in the second quarter of 2015 from the prior quarter, driven by midstream transactions from corporate buyers, the analyst firm said in a recent report.

During the three month period ending June 30, 2015, there were a total of 47 oil and gas deals (with values greater than $50mn) accounting for $38.8bn, compared to 39 deals worth $34.5bn in the first three months of the year, and 65 deals worth $48.9bn in the second quarter of 2014.

The number of deals in the midstream segment jumped 110% while value increased 130% compared to the second quarter of 2014. There were 21 midstream deals, or 44% of total deal activity, contributing $27.7bn in value.

“Interest in the midstream sector drove second quarter deal volume and value as corporate buyers pursued opportunities to grow their gathering and transportation operations as U.S. onshore production continued to increase despite the low oil and gas price environment,” said Doug Meier, PwC’s US energy sector deals leader.

“Going forward, we’ll see activity continue as businesses realign their strategies to the current oil price realities," he added.

Corporate deals represented 68% of the total deal volume and 88% of the total deal value, which included three midstream megadeals (deals valued over $1bn) in the quarter.

There were 32 corporate deals worth $34.2bn versus 15 asset deals worth $4.6bn in the second quarter of 2015.

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