SELECT INTERNATIONAL UPSTREAM TRANSACTIONS
15-Aug- 17 Ikkuma Resources Undisclosed $27 Canada: AB Conven. Property Gas
2-Aug- 17 Perenco OMV — Tunisia Property Oil
1-Aug- 17 Undisclosed Birchcliff $80 Canada: AB Conven. Property Oil + Gas
26-Jul- 17 Rouge Rock Melbana Energy — Australia Farm-In Gas
25-Jul- 17 Blackbird Energy Undisclosed — Canada: AB Montney Acreage Oil + Gas
19-Jul- 17 Mari Petroleum Tullow Oil — Pakistan Farm-In Oil + Gas
17-Jul- 17 Centrica Stadtwerke Munchen $445 Norway: North Sea Corporate Gas
SELECT GLOBAL OILFIELD SERVICE TRANSACTIONS
16-Aug- 17 US Silica Holdings Mississippi Sand $95 US: Missouri Corporate Frac Sand Mine
15-Aug- 17 Transocean Holdings Asia Capital; York Capital; Songa $3,400 Cyprus Corporate Offshore Drilling Rigs
14-Aug- 17 Nabors Tesco $140 US: Texas Corporate D&C Products
2-Aug- 17 Jacobs Engineering CH2M Hill $3,266 US: Colorado Corporate EPC Services
21-Jul- 17 Quanta Services Stronghold $450 US: Texas Corporate Infrastructure Services
18-Jul- 17 Select Energy Services Rockwater Energy $516 US: Texas Corporate Water Management
Canadian counties) reported at $27.70/bbl and the SCOOP
condensate in line with Karnes Trough Eagle Ford at $34.70/
bbl. While reported breakevens and the ranking of various plays
will vary by operator, it is clear that the STACK/SCOOP plus
the newer Merge have tremendous potential.
Private equity firms have already recognized the STACK and
patiently built out positions. While the Silver Run II/Alta Mesa
merger is the first big STACK deal with a disclosed value in
2017, there had already been several substantial deals between
private operators. Apollo-backed Chisholm Oil & Gas bought
53,000 acres and 3,000 boe/d in and around Kingfisher County.
Vitruvian Exploration, which had already sold a SCOOP package
to Gulfport for $1.9 billion in 2016 for a record setting $28,000/
acre, sold a package in the STACK to another private equi-ty-backed firm.
If there is a favorable market reaction to the Alta Mesa deal,
more of these private equity portfolio companies are likely to
move to market, either through IPOs or sales to publicly traded
firms. Still, there are several challenges the STACK/SCOOP face
in reaching a Permian-like land rush, some of which were absent
from the boom that took hold last year. Compared to the Del-
aware and Midland basins, the STACK/SCOOP cover relatively
small geographic footprints with correspondingly small sweet
spots. And while there are as many as 10 horizontal targets
identified in the play by operators, many still need to be proved
as commercially viable resource plays.
Finally, the biggest challenge to another rush of deals may
not be geology, but capital. A key component of the Permian
buying boom was the willingness of investors to support ac-
quisitions via overnight equity raises. However, market appetite
for these has tapered off considerably. According to PLS data,
there have been only $1.6 billion in E&P secondary offerings on
Wall Street since the end of Q1, well below the pace in 2016
when equity secondary offerings clocked in at $30 billion.
In addition, would-be STACK buyers looking for financing
will be competing with the established Permian operators now
in need of capital to drill up their locations. From January 2016
through August 2017, PLS data shows companies spent $40
billion on land and reported purchasing over 25,000 net loca-
tions. Assuming an average D&C cost per well of $7.2 million,
that will require nearly $200 billion to develop. Some will be
funded internally, but so far, the shale industry has depended
considerably on outside funding to fuel ambitious growth.
Midstream service providers are also keen to take advantage
of growing volumes in the STACK with or without a corresponding boom in deals. Silver Run II secured its midstream capacity
by rolling up Kingfisher Midstream in its deal with Alta Mesa.
Kingfisher Midstream has over 300 miles of pipelines along
with 60 MMcf/d of current processing capacity (more on the
way) and 300,000 dedicated acres.