Deal Insight

Shell acquires BG: an in-depth view

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13 April 2015

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.

Table of contents

  • Executive summary
    • Growth underpinned by Brazil deepwater and LNG
    • Legacy asset base has supported investment in growth assets
    • A refreshed exploration portfolio offers longer-term options
    • LNG trading business valuation sensitivities
    • Technical resource upside
    • 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

Tables and charts

This report includes 11 images and tables including:

  • 1) WoodMac base forecast for BG production; 2) WoodMac base valuation of BG upstream portfolio
  • Deal analysis: Table 1
  • Deal analysis: Table 2
  • Deal analysis: Table 3
  • Oil & gas pricing and assumptions: Table 1
  • Oil & gas pricing and assumptions: Table 2
  • Upstream assets: Table 1
  • 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

What's included

This report contains:

  • Document

    Shell acquires BG: an in-depth view

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