Deal Insight

Shell acquires BG: an in-depth view

13 April 2015

This report is currently unavailable

Contact us

Submit your details to receive further information about this report.

First name
Last name
Job Title
Company
Email
Telephone

Region

Message

Consent

Please keep me informed about Wood Mackenzie products, services and events.

For details on how your data is used and stored, see our Privacy Notice.

- Available as part of a subscription
- FAQ's about online orders

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.

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

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