Deal insight
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12 Pages

Shell acquires BG: an in-depth view


Shell acquires BG: an in-depth view

Report summary

The strategic drivers for Shell are clear and compelling: the deal establishes it as the leading player globally in both deep water and LNG. Deal economics are equally attractive: we value BG at US$84 billion (NPV10), or an Implied Long-term Oil Price of US$85/bbl.

What's included?

This report includes 1 file(s)

  • Shell acquires BG: an in-depth view PDF - 356.77 KB 12 Pages, 7 Tables, 4 Figures

Description

The upstream oil and gas industry conducts activities against a backdrop of growing energy and environmental challenges. Political instabilities, international conflicts and government and environmental regulation have all impacted the production process.

This has forced companies to re-examine their corporate strategy, moving away from high-risk exploratory drilling to lower-risk exploration in mature basins as they search for increased returns.

This Upstream Oil and Gas Deal Insight report provides an in-depth analysis of this deal. You will also find information about upstream assets and the strategic rationale behind the deal.

For investors and businesses, this deal insight report provides an understanding of the effect this deal will have on the market, including oil and gas pricing and assumptions. Use it to keep up to date with deal announcements, gain expert insights and analyse potential developments that might affect your strategy.

Wood Mackenzie goes beyond company-reported data and announcements to give you an independent and informed view. Our unique valuation metrics are underpinned by our deep understanding of upstream assets and companies. We help you objectively benchmark and evaluate asset and corporate deals so you can compare deal economics around the world.

  • Executive summary
  • Upstream assets
    • Growth underpinned by Brazil deepwater and LNG
    • Legacy asset base has supported investment in growth assets
    • A refreshed exploration portfolio offers longer-term options
  • Deal analysis
    • LNG trading business valuation sensitivities
    • Technical resource upside
  • Strategic rationale
    • Shell
      • Next steps - rationalisation
      • Next steps - cash flow generation
      • Next steps - further acquisitions on the cards?
    • BG
    • Appendix 2 - BG portfolio upsides and risks to our base modelling
      • Brazil
    • Appendix 3 - Transaction details
  • Oil & gas pricing and assumptions

In this report there are 11 tables or charts, including:

  • Executive summary
  • Upstream assets
    • 1) WoodMac base forecast for BG production; 2) WoodMac base valuation of BG upstream portfolio
    • Upstream assets: Table 1
  • Deal analysis
    • Deal analysis: Table 1
    • Deal analysis: Table 2
    • Deal analysis: Table 3
  • Strategic rationale
    • Shell / BG upstream portfolio overlap, WoodMac NPV10: 1) by country; 2) by resource theme
    • Shell BG combined vs. peers based on: 1) production; 2) total resource
    • 1) Share price performance (relative) and; 2) market premium / discount to WoodMac valuation
    • Appendix 1 - BG portfolio base modelling and valuation
  • Oil & gas pricing and assumptions
    • Oil & gas pricing and assumptions: Table 1
    • Oil & gas pricing and assumptions: Table 2
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