Deal insight
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7 Pages

EOG Resources buys Yates Petroleum for US$2.5 billion


EOG Resources buys Yates Petroleum for US$2.5 billion

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.

What's included?

This report includes 1 file(s)

  • EOG Resources buys Yates Petroleum for US$2.5 billion PDF - 412.57 KB 7 Pages, 8 Tables, 3 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
  • Transaction details
  • Upstream assets
  • Deal analysis
  • Upsides and risks
  • Strategic rationale
    • EOG Resources
    • Yates Petroleum
  • Oil & gas pricing and assumptions

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

  • Executive summary
    • Executive summary: Table 1
  • Transaction details
  • Upstream assets
    • Upstream assets: Table 1
    • WM sub-play valuations
    • Upstream assets: Table 2
  • Deal analysis
    • Benchmarking: per-acre consideration values for comparable 2016 Permian deals
    • Deal analysis: Table 1
    • Deal analysis: Table 2
    • Deal analysis: Table 3
  • Upsides and risks
  • Strategic rationale
    • WM pro-forma liquids production forecast versus EOG's previous growth targets*
  • Oil & gas pricing and assumptions
    • Oil & gas pricing and assumptions: Table 1
    • Oil & gas pricing and assumptions: Table 2
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