M&A

Industrywide Issues | M&A

Oilfield Serv. Co. Keane Group Buys Trican Well Service for $247M
January 27, 2016January 26, 2016

Keane Group is a Texas-based oilfield services company that provides fracking, wireline and top-hole air drilling services to oil and gas companies in the Marcellus/Utica as well as several other major basins. Keane announced yesterday they are buying out Canadian-based Trican Well Service for $247 million. The expansion will, according to Keane, triple its fracking capacity and give it access to proprietary technology. Cool, we love shiny new objects! Here’s the Keane announcement they are buying Trican…
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Industrywide Issues | M&A

Who Else is Waiting in the Wings to Buy Failing Shale Cos?
January 26, 2016January 26, 2016

Just last week MDN told you about Chief Oil & Gas’ billionaire founder Trevor Rees-Jones who is ready, willing and able to buy distressed assets from shale companies in trouble (see Chief O&G Founder “Licking His Chops” to Buy Distressed Assets). However, Rees-Jones isn’t the only interested party sitting on the sidelines eager to start buying shale companies. Investment firms including KKR, Warburg Pincus, and Apollo (among others) with an estimated $60 billion of cash are also in the hunt…
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Energy Companies | Industrywide Issues | Jobs | M&A | Shell

Shell to Cut 10,000 Jobs After Buying BG; Exiting Shale Drilling
January 20, 2016January 20, 2016

In April 2015 MDN brought you the announcement that Shell was buying BG Group (the former British Gas) in a megamerger worth $69.7 billion (see LNG Love Story: Shell Makes Play to Buy BG in $69.7B Megamerger). As we alluded in the title of that post, the deal is all about LNG–liquefied natural gas. The merger will make Shell THE dominant player in LNG worldwide. The process to obtain regulatory approval in multiple countries has been long and arduous. Later this month, on Jan. 28, BG shareholders will cast a final vote on the plan. In an update issued this morning by Shell, the company says they expect to complete the BG transaction in the next few weeks, and after they do, there will be a total of 10,000 layoffs between the two companies. Don’t you just love mergers? Ax and hack away. Toss a few thousand jobs here and a few thousand jobs there. We know, times a tough. Companies must cut in order to stay in business. We just want to remind you that behind these abstract numbers are 10,000 real people with real families that depend on them. Shell also said they’re hightailing it out of shale…
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Industrywide Issues | M&A | Research

Energy M&A Deals Hardest Hit in 2015, 6.8% Fewer Deals than 2014
January 20, 2016January 20, 2016

Mergermarket, a company that provides intelligence and news to people involved in big mergers and acquisitions (M&A) deals recently released its Energy, Mining & Utilities (EMU) Trend Report for 2015. It is a recap of M&A deals in the energy sector for last year. Among the findings: the energy sector was the hardest hit sector for M&A deals. There were 957 deals worth $547.7 billion last year, a 6.8% decrease from 2014. The report (full copy below) contains a lot of interesting information about the biggest M&A deals from last year, along with identifying the companies that worked on putting those deals together…
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Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

Williams Board “Unanimously” Committed to Selling to ETE
January 19, 2016January 19, 2016

Apparently somebody has been whispering nasty rumors that Williams isn’t really all that committed to completing a sale of themselves to Energy Transfer Equity (ETE). After six months of wooing Williams, ETE got tired of being rebuffed and went public with their bid to buy out Williams, one of the northeast’s biggest midstream companies (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). In the end Williams caved and decided to sell, but they did it too late. By the time they accepted ETE’s offer in September, the market (and stock prices) in the oil/gas sector had already started a downward spiral, and Williams ended up getting $10 billion less than originally proposed (see Williams Accepts ETE’s “Indecent Proposal” – Price Went Down $10B). It’s now January and the deal is still not closed. And apparently somebody has either been telling tales out of school, or simply spreading nasty rumors, because the entire board of Williams voted, unanimously, to tell the world they really do want to sell. Really. Williams felt compelled to issue a press release stating as much…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A | Regulation

Europe Puts Halliburton/BH Merger Under a Microscope
January 14, 2016January 14, 2016

The Halliburton buyout/merger with Baker Hughes continues to be in trouble. In November 2014 MDN first reported on the deal, really Halliburton forcing Baker Hughes, to merge, with Haliburton paying an expected $34.6 billion (see Shotgun Wedding: Halliburton Forces Baker Hughes to Sell). Both companies have major operations in the Marcellus/Utica, so this merger is of keen interest for those of us in the northeast. Along the way both companies have had to sell off certain assets to please government regulators (see Halliburton/Baker Hughes Hold a Pre-Merger Garage Sale). The “marriage” was supposed to happen by the end of last year, but the U.S. Dept. of Justice isn’t satisfied. They have anti-trust concerns that, so far, Halliburton has not been able to address to DOJ’s satisfaction (see DOJ Tells Halliburton/Baker Hughes “No Deal Yet” – What’s Next?). What was a few whispers has become a chorus that the deal may be in trouble (see Whispers Turning in Chorus, Halliburton/BH Deal in Trouble). Add one more worry to the list: The European Commission has launched a “second phase” of their investigation into the deal, which is problematic for Halliburton. The European Commission says they see “serious potential competition concerns” with the deal. Halliburton/BH says, no big deal…
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Industrywide Issues | M&A | Research

IHS Study: M&A Deals Plunged in 2015, So Did Shale Investment
January 6, 2016January 6, 2016

No doubt about it, 2015 was a tough year in the shale energy industry. With shale energy, investment happens when drillers decide to drill holes in the ground. Without a hole, money doesn’t get spent. And when money isn’t being spent on drilling, other businesses along the supply chain begin to see their revenue dry up. Global consulting and research firm IHS, or Information Handling Service, has just published the “IHS Energy Global Upstream M & A Review.” As part of their promotion of the new study (must be a customer to score a copy), IHS released a detailed summary of their findings. One finding in particular stood out to MDN: In 2014 unconventional/shale drillers spent $75 billion on upstream (exploration & production) activities. In 2015 that number plunged to less than $30 billion–a 60% drop. That statistic more than any illustrates what happened to the oil and gas industry in 2015. Here’s more great insights from IHS on what happened in 2015…
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Energy Companies | EnerVest | Industrywide Issues | Jobs | M&A | Range Resources Corp | Statewide VA | Virginia

Range Res. Completes Sale of VA Assets to EnerVest, 55 Lose Jobs
January 4, 2016January 4, 2016

In November MDN reported that Range Resources would sell 3,500 operated wells and approximately 460,000 net acres in the Nora/Haysi combined fields located in southwestern Virginia for $876 million to an unnamed buyer (see Range Sells Coal Bed Methane Wells in VA, Focusing on Marcellus). The stated reason for the sale is to pay down debt and use the money for more Marcellus drilling. The deal is done and dusted. The final price turned out to be $865 million, $11 million less than announced. Although Range has remained tight-lipped about who the buyer was, EnerVest admitted they are the buyer. At the time Range first announced the impending sale, they issued a WARN notice that up to 158 people would lose their jobs when the sale was completed (see 158 Range Resources Employees in SW VA May Lose Jobs by Dec 30). The sale was completed on Dec. 30, but fortunately not all 158 jobs were axed. “Only” 55 jobs were axed while 103 people were extended offers to work for EnerVest. Of course the 55 people who lost their jobs had a sucky Christmas…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

DOJ Tells Halliburton/Baker Hughes “No Deal Yet” – What’s Next?
December 17, 2015December 17, 2015

As we told you yesterday, the Halliburton buyout of Baker Hughes continues to be in trouble due to regulators (see Whispers Turning in Chorus, Halliburton/BH Deal in Trouble). Regulators in Australia and Brazil are balking at the deal, and there’s grumbling in the European Untion. But that’s all inconsequential compared to the main obstacle–the U.S. Dept. of Justice (DOJ). Earlier this week Halliburton/BH announced the timing agreement to reach a deal with the DOJ will expire with no deal worked out with the feds. However, they will keep working on a deal with the DOJ–they haven’t given up. What it means is that the new marriage date, which had slipped from December 1st to “early 2016,” will now be April 30, 2016–more than a year after announcing their nuptials. That is, IF they can hammer out a deal that pleases the bureaucrats at the Obama DOJ. Here’s the statement from Halliburton/BH issued earlier this week…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Whispers Turning in Chorus, Halliburton/BH Deal in Trouble
December 16, 2015December 16, 2015

Just one week ago MDN alerted you to what were (then) whispers that the Halliburton buyout of Baker Hughes not be the done deal they portrayed it as (see Is the Halliburton Buyout of Baker Hughes in Trouble?). The whispers that there’s trouble in regulatory paradise around this deal are quickly becoming a chorus. Here are a couple of more articles, from reliable and respected news services, questioning whether or not the merger will happen…
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Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

Looks Like a March 2016 Wedding for ETE & Williams
December 15, 2015December 15, 2015

In September Williams finally relented and accepted a buyout/merger offer from Energy Transfer Equity (see Williams Accepts ETE’s “Indecent Proposal” – Price Went Down $10B). Deals like this one, with ETE paying $37.7 billion for Williams, take time to complete. There are lots of regulatory hoops to jump through. The two companies said in their original announcement they expect the deal will be done in “the first half of 2016.” Smart move on their part to not commit to a specific date too early. From an announcement issued yesterday, we now have a much better idea of the timing. The announcement says the two companies are complying with certain regulatory requests and that they won’t get hitched before March 18, 2016. Which means if all goes well in regulatory hell between now and then, we’ll have a March wedding…
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Duke Energy | Energy Services | Industrywide Issues | M&A

Piedmont Natural Gas CEO’s Pure Gold Parachute – $14.4M
December 15, 2015December 15, 2015

In October Duke Energy, the largest electric power holding company in the United States and a utility with 7.3 million customers in the southeast and Midwest, announced they had cut a deal to buy Piedmont Natural Gas for $4.9 billion in cash and the assumption of $1.8 billion in existing debt–for a total deal price of $6.7 billion (see Duke Energy Buys Piedmont NatGas for $6.7B, Marcellus Connection). Piedmont is a midstream and natgas LDC, or local distribution company/utility, with operations primarily in North Carolina, South Carolina and Tennessee. At least one person is going to make a boatload of money from the deal. Piedmont’s CEO Tom Skains will get a $14.4 million severance check when the deal goes through. Looks like the color of Skains’ parachute is pure gold…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Is the Halliburton Buyout of Baker Hughes in Trouble?
December 9, 2015December 9, 2015

Is the Halliburton/Baker Hughes wedding in trouble? Last time we checked in (in September) both companies were holding garage sales to dump business units to comply with regulators’ concerns over anti-competitiveness (see Halliburton/Baker Hughes Hold a Pre-Merger Garage Sale). Halliburton is attempting to buy Baker Hughes in a deal worth $34.6 billion (see Shotgun Wedding: Halliburton Forces Baker Hughes to Sell). The shotgun wedding was supposed to happen by the end of this year, then got pushed into early next year. Halliburton has experienced a series of “headaches” with their proposed buyout of Baker Hughes. Now the headaches are, according to one source, turning into a migraine. Yesterday the country of Brazil lodged complaints and concerns over the proposed merger. Brazil’s opposition alone would not be enough to sink the deal–but Brazil’s opposition combined with opposition coming from other sources just may be enough…
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Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

Golden Parachutes Pop Open for MarkWest Top Management/Board
December 7, 2015December 7, 2015

Last week MarkWest Energy Partners ceased to exist as an independent company (see MarkWest Energy Investors/Unitholders Approve Merger with Marathon). MarkWest “units” (equivalent to shares of stock) stopped trading on the New York Stock Exchange on Friday. The company became part of Marathon Petroleum. And when it did, high level executives at MarkWest, at least some of them, got new positions with Marathon. That is, according to the prediction of former MarkWest CEO and co-founder John Fox, MarkWest’s upper management and board members got golden parachutes (i.e. they personally benefited) from the sale of MarkWest. Here’s how they did…
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Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

MarkWest Energy/Marathon Petroleum Exchanging Notes
December 7, 2015December 7, 2015

Remember exchanging notes in grade school? “Do you like me? [ ] Yes [ ] No” Exchanging notes in the corporate world is a little more complex than that–but it seems to us like it’s not far removed from exchanging notes in grade school. In the case of high finance and the MarkWest Energy/Marathon Petroleum merger deal, the notes getting exchanged have (big) financial value and implications. MarkWest/Marathon are exchanging old MarkWest IOUs (notes) for new Marathon notes. If it doesn’t get delayed, the exchange will happen on Dec. 18–just in time for Christmas. Will it be a Merry Christmas for existing MarkWest note holders? If you can figure it out, please let us know…
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Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

MarkWest Energy Investors/Unitholders Approve Merger with Marathon
December 2, 2015December 2, 2015

At a special meeting yesterday, the unitholders (i.e. shareholders) of MarkWest Energy voted to approve the merger/buyout offer from Marathon Petroleum. MarkWest will, by Friday of this week, become a wholly-owned subsidiary of Ohio-based Marathon. The approval comes after both co-founders of the company, John Fox and Brian O’Neill, came out strongly against the deal (see Both MarkWest Co-Founders Strongly Against Sale to Marathon). One of their criticisms is that current MarkWest management gets a “golden parachute” from the deal–they personally make boatloads of money for selling the company. But that didn’t seem to bother investors/unitholders who obviously think MarkWest combined with Marathon is better than MarkWest on its own. Here’s the official MarkWest announcement following the vote…
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