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This Sector Dominated M&A Activity in Energy Sector in 2017

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Sep. 25 2017, Updated 8:15 a.m. ET

Subsector analysis

As we have been discussing, merger and acquisition (or M&A) activity in 2017 within the energy sector has been dominated by the upstream oil and gas sector.

According to PWC’s 1Q17 report, the upstream sector generated 32 deals, or 60% of the total deals in 1Q17. Deals in the upstream sector totaled $36.6 billion, or 50% of the total deals by value. The midstream sector saw the second-highest number of deals in 1Q17 at 14, or 26% of the total number of deals with a total value of ~$35 billion, or 48% of all deals by value.

Similar trends were evident in 2Q17 as well with the upstream sector accounting for 58% of the total deals by number and a value of ~$20 billion, or 54% of the deals by value. The midstream sector accounted for 26% of the number of deals and ~$9.4 billion, or 25% of total deal values.

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Key midstream deals this year

In February, Plains All American Pipeline (PAA) and Noble Midstream Partners (NBLX) announced a 50/50 joint venture to acquire Advantage Pipeline for $133 million.

Again in February, Williams Partners (WPZ) sold its 50% ownership stake in the Delaware Basin JV Gathering, operated by Western Gas Partners (WES), in exchange for Western Gas’s 33.8% ownership in two Marcellus Shale natural gas gathering systems operated by Williams Partners.

Other midstream activity this year included ONEOK’s (OKE) merger with ONEOK Partners (OKS) in February. IPO activity this year included Hess Corporation (HES) and its joint venture partner Global Infrastructure Partners’ $350 million IPO of Hess Midstream Partners (HESM) in April.

Downstream and OFS deals

Downstream and oilfield services deal activities were relatively subdued. A noteworthy deal that took place in the oilfield services (or OFS) sector this year was the Baker Hughes-General Electric (GE) merger to form Baker Hughes, a GE Company (BHGE). While the deal was announced last year, the transaction was completed this year. To know more, read How Baker Hughes Benefits from Its Latest Merger.

Refer to previous parts to know about key upstream deals this year.

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