Guide to E&P International Asset Transactions – Know The Players

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Those of us who have focused our professional skills on domestic US oil and gas exploration and production sometimes lose sight of how actively international oil and gas concessions/properties/interest are trading hands.

Below is a quick collage of international assets transactions

Collage of international assets transactions

Collage of international assets transactions

Since 1/1/2013 there have been 8677 asset transactions worldwide in which a working interest/participation did/would have changed hands. Since only 6% of these were cancelled, it’s fair to assume that the international oil and gas asset
market is active and reasonably healthy.

With about 6 more weeks left in this year, with no new deals 2017 will close out at the second highest level of ownership deal flow (transactions + pending deals) since 2013.

Graph of international asset transactions by year

Graph of international asset transactions by year

We would expect the pace of international asset transactions to maintain this momentum as oil and gas pricing stays relatively stable (or increases) and especially if petroleum ministries (national and provincial) begin to incentivize investment of exploration and development CAPEX.

EXAMPLES

The largest transaction by acreage amount was Petronas’ 5/20/2014 purchase of STR Projetos e Participacoes Ltda’ 37.5% interest in lightly drilled Blocks 9 and 11… located NNW of Malakal and including Khartoum.., South Sudan [total acreage =68.8 million acres, or a piece of land measuring about 330 x 330 miles.

That’s a big chunk of territory.

Map of Petronas' interest in Blocks 9 and 11

Map of Petronas’ interest in Blocks 9 and 11

For perspective, this block of acreage would contain the entirety of the Permian Basin.

Map of the Permian for comparison

Map of the Permian for comparison

This transaction dwarfs any of the other 26 Petronas interest purchases ….they
must have seen a lot of East African Rift potential here, since only 6 wells have been drilled in the blocks, all of them are dry holes, and just one well had oil shows.

More recently, INEOS was very active in 2017, transacting for approximately 740,000 acres of mostly gas/gas & oil reserves.

Map of INEOS activity 1

Map of INEOS activity 1

Map of INEOS activity 2

Map of INEOS activity 2

INEOS’ gross 3,878,000 acre position (all years) is all European and is highly concentrated in the UK, and represents participation interests ranging from 10% to 50%. About 2/3 of the acquired interests are offshore,

Chart of INEOS acreage by country

Chart of INEOS acreage by country

There appears to be little correlation between acreage block size and % interest purchased, so it looks like INEOS is making very focused acquisitions.

ONSHORE

Chart comparing Interest Purchased to Area ONSHORE

Chart comparing Interest Purchased to Area ONSHORE

OFFSHORE

Chart comparing Interest Purchased to Area OFFSHORE

Chart comparing Interest Purchased to Area OFFSHORE

Our International subscribers can use all the information in Asset Allocations to
determine the patterns of buyers and sellers, and use the Block Card to assess
where buyers and sellers have other country assets that you should know about.

Example of a Block Card in the DI International Web App

Example of a Block Card in the DI International Web App

Guide to E&P International Asset Transactions – Know The Players

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Mark Nibbelink

Enverus Co-Founder, Director of University Outreach. Before co-founding Enverus (formerly Drillinginfo) in 1999, Mark had a long career as a prospect geologist at Gulf Oil before beginning work as an independent geologist. Mark is responsible for quality control and data integrity. He received his Bachelor of Arts in geology and his master’s in geology and geophysics from Dartmouth College.