UK M&A Activity Slumps in Q4: GlobalData

The UK saw a decline in the total value of oil and gas industry mergers and acquisitions (M&A) in Q4 2019: worth $1.75bn, the total was up by 59.3% over the previous quarter but down 32.3% when compared with the last four-quarter average of $2.59bn, said analysts at GlobalData.

The UK held a 2.8% share of the global oil & gas industry M&A deal value that totalled $63.54bn in Q4 2019.

The UK recorded 33 deals during Q4 2019, marking a rise of 17.9% over the previous quarter and a drop of 2.9% over the last four-quarter average. The top five oil & gas industry M&A deals accounted for 93.4% of the overall value during Q4 2019. They were: Seplat Petroleum Development's $596.68mn acquisition of Eland Oil & Gas; the $415.6mn asset transaction with Stolt-Nielsen by CMB Financial Leasing; GeoPark Colombia's $314mn acquisition of Amerisur Resources; the $280mn asset transaction with Energean Oil & Gas by Neptune Energy Group; and North Star Holdco's asset transaction with Seacor Marine Holdings for $32mn.

A number of companies entered the North Sea with private equity backing a few years ago, seeing value that the majors could not extract from small or complex reservoirs after the 2014 oil price collapse.

However their exit strategies have been confounded by the change in the investment environment. Banks are shying away from fossil fuels and the upstream regulator is shifting its emphasis from maximising the economic recovery of the UK continental shelf, towards minimising carbon emissions.