Name: EOG Resources buys Yates Petroleum for US$2.5 billion
Brand: Wood Mackenzie
SKU: 49430
Price: 1650 USD
Availability: OnlineOnly
Author: Wood Mackenzie

Deal Insight 08 September 2016

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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below

Report summary

The US$2.5 billion deal consideration is below our base-case valuation. And we believe our conservative base-case assumptions (e.g., type-well IP rates lower than EOG's latest results; no value attributed to 76% of the acreage) skews our valuation's risk profile to the upside. Deal metrics that exclude our modelling assumptions also suggest that the deal consideration was inexpensive: relative to comparable Permian deals in 2016, EOG paid 65% less on a dollar-per-acre basis for a Delaware position that is similar in quality and significantly higher in scalability.

Executive summary
Transaction details
Upstream assets
Deal analysis
Upsides and risks
Strategic rationale
- EOG Resources
- Yates Petroleum
Oil & gas pricing and assumptions

Tables and charts

This report includes the following images and tables:

Executive summary: Table 1Upstream assets: Table 1WM sub-play valuations

Upstream assets: Table 2Benchmarking: per-acre consideration values for comparable 2016 Permian dealsDeal analysis: Table 1Deal analysis: Table 2Deal analysis: Table 3Oil & gas pricing and assumptions: Table 1Oil & gas pricing and assumptions: Table 2WM pro-forma liquids production forecast versus EOG's previous growth targets*