Apache acquires interest in Beryl Area for US$1.75 billion Report

Deal Insight 21 September 2011

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Report summary

Apache is to acquire a package of UK assets from ExxonMobil for US$1.75 billion. The key interests are a 50% operated interest in the Beryl Area, plus operated interests in surrounding subsea tie-backs. This is a landmark transaction in the European M&A market: the biggest asset deal since 2005, and the largest disposal by any Major to date.Our base case valuation of the deal is US$1.33 billion. However, this number reflects the development plans of the current operator, ExxonMobil. For ...

Executive summary
Transaction details
Upstream assets
- Beryl Area
- Nevis South
- Other interests
Deal analysis
- Upsides
  - Forties lesson 1: Apache has an outstanding track record of delivering organic upside
  - Forties lesson 2: value creation through M&A is a tough game
- Risks
  - Partner alignment and risk of pre-emption
  - Abandonment liability
  - Focus
- ExxonMobil perspective
Oil & gas pricing and assumptions

Tables and charts

This report includes 9 images and tables including:

Executive summary: Table 1
Deal analysis: Table 1
Deal analysis: Table 2

Oil & gas pricing and assumptions: Table 1
Oil & gas pricing and assumptions: Table 2
Upstream assets: Table 1
Wood Mackenzie base production forecasts; 1) acquired portfolio (net to Apache); 2) Beryl (gross field)
Forties production: Wood Mackenzie 2003 view vs. current view
Wood Mackenzie analysis of value creation through Forties acquisition