Cataclysmic year, page-45

results of a study into three O&G acquisitions in late 2014 and 2015, makes for interesting reading:

Survey of recent Acquisitions
Notes:

• SP is last available prior to the acquisition being lodged
• Production figures best available at time this survey was completed
• Were possible reserves are quoted in boo however in some cases figures are in boe

Acquisition announcement Date November 2014
Purchaser Ophir Energy
Seller Salamander Energy
Listed Shares 259.13m
SP @ Proposed Acquisition 58GBP ($0.90US @ $US1.56 to £1 GBP @ Nov 2015)
2P Risked Reserves 65mboe
2C Contingent Reserves 120mboe
Production 14.2k boe/d
Acquisition Value £267m ($419US @ $US1.56 to £1 GBP)
Acquisition Value per Share 79.5 GBP ($1.24US)
Acquisition Value pboo 2P Reserve £4.10 per boo ($6.45 US per boe)
Note: Salamander quotes in boe however the ratio of oil to gas production appears to be ~ 90% oil to 10% gas

Acquisition announcement Date 30^th June 2015
Purchaser Crescent Point Energy
Seller Legacy Oil & Gas
Listed Shares 199.37m
SP @ Proposed Acquisition $C2.45 ($1.98 US @ $0.81US per $1C)
2P Risked Reserves 528m boo
2C Contingent Reserves 279m boo
Production 140k boo/d
Acquisition Value $C3.31b ($2.68b US @ $0.81US per $1C)
Acquisition Value per Share $C7.5 ($6.07 US @ $0.81US per $1C)
Acquisition Value pboo 2P Reserve $C3.30  ($2.67 US @ $0.81US per $1C)
Note: Previous to the T/O there was considerable SH unrest at the poor performance of the SP contributing to the low value to the 2P Reserves when compared to the ~300% increase in SH value!!!
Acquisition announcement Date June 2015 (note: ENOC originally offered 650p raised to 735p before the final offer.
Purchaser ENOC (Emirates National Oil Company)
Seller Dragon Oil
Listed Shares 491.73m
SP @ Proposed Acquisition 685GBP ($US1.06 @ £1GBP to $US1.55, June 2015)
2P Risked Reserves 663mboo
2C Contingent Reserves 93mboo
Production 85k boo/d
Acquisition Value £3.7b GB
Acquisition Value per Share 800GBP ($1.24US)
Acquisition Value pboo 2P Reserve £5.54GB ($US8.57)
Notes: at time of purchase ENOC already owned ~54% of Dragon but aiming for full ownership.
Average price per boo 2P Reserve    $5.90US per boo 2P reserves
(All acquisitions)

I believe that the Crescent acquisition of Legacy was a ‘distressed’ acquisition as indicated by the SH discontent and by deleting this from the reserve value we get a far better indication of acquisition value:

Average price for Ophir & ENOC $7.52US per boo 2P reserves

I believe that, in todays low POO we need to reconsider the values we are expecting to receive in any T/O situation and that round $7.50 to $9.00 US should be considered, if the POO rises then this value would/should increase accordingly.

Its also interesting to note the T/O of Salamander whose SP was very low when considering its reserves, this resulted in a lower than expected price per boo but a 300% increase in SP.

HKP