After a quiet start to 2019 M&A activity, Chevron and Occidental woke the oil & gas industry from its slumber with competing bids to acquire Anadarko, setting the entire industry and the media who cover it into a whirlwind of speculation about the potential short- and long-term ramifications.
On April 12, Chevron announced its $50 billion bid, which would be the sixth largest deal in oil & gas history and the largest deal since Shell bought BG for $82 billion in 2015.
Less than two weeks later, on April 24, Occidental topped that number with its $57 billion bid. The offer of $76/share (50 percent equity, 50 percent cash) represents a ~17 percent premium to Chevron’s $65/share bid using prices at announcement, and a 20 percent premium using closing prices as of April 23.
Minutes after both companies made their bids public, our research team members around the world began delivering their initial insights via the new DI Dealmaker Suite platform. I’ve written in previous posts about how the integration of the Drillinginfo, PLS, and 1Derrick databases and technologies transform how our clients learn about and evaluate potential and completed deals, and that power has been on full display during the 24 hours following both announcements.
The Chevron deal turned what might have been a typical Friday into one of the busiest — and most interesting — days of the last two years. Chevron made its announcement at 5 a.m. Eastern, and that’s when we started developing a steady stream of rich and timely content for our clients:
Friday, April 12, 2019
- 5 a.m. — Chevron announces the agreement to acquire Anadarko, Drillinginfo initiates deal analysis
- 5:17 a.m. — The first email requests for interviews with our analysts from media outlets including Reuters, CNBC, The Wall Street Journal, Seeking Alpha, and the Denver Post start flooding in
- 7:25 a.m. — The deal is already added to the Drillinginfo M&A database with initial data points, source documents, and a brief analysis
- 10:47 a.m. — Map digitization and updates are loaded into the database so our clients can see Chevron’s complete acreage position including the Anadarko acreage, and the specific acreage associated with the deal
- 11:45 a.m. — We post this article to the Drillinginfo blog that includes valuation analysis breaking out the Permian acreage valuation — before any of our competitors
- 2:12 p.m. — The complete deal is updated in the database with valuation breakout and analysis
- 5:17 p.m. — A seven-page Deal Insight report is published with — detailed maps of acreage, historical comps as well as valuation breakouts, history and effect on both parties, and forward-looking market analysis
Saturday, April 13, 2019
- 8 a.m. — The Executive Deal Summary (EDS) report is published to the DI Dealmaker Suite database. It includes all relevant information such as total acreage, drilling locations, rig counts, and net production impact
We launched the EDS platform late last year, and it’s a key component of DI Dealmaker Suite. EDS delivers reports on any significant transaction within 48 hours of a deal being announced.
The full Chevron-Anadarko report is only available to subscribers, but here are some of the slides to give you a better idea of just how comprehensive it is, beginning with the cover page that breaks down the highlights:
My colleague Andrew Dittmar told CNBC’s Tom DiChristopher that, “a large driver of the deal is Anadarko’s prized position in the Delaware Basin where Chevron increases its position by 240,000 net acres to more than 1,400,000 net acres. The Delaware Basin currently provides the best well economics of any shale play in the country.”
That’s clear when you look at these slides:
Notice that this Initial Production (30-day average) slide includes direct links to source documents in our database that take you directly to the relevant source documents.
The report also provides similar breakdowns of how the deal will affect Chevron’s presence in both the DJ Basin and the Gulf of Mexico.
As the saying goes, “there’s no rest for the weary.” We’ve already populated the DI Dealmaker Platform with our analysis of the Occidental deal, fielded a number of media interviews, and are finalizing the EDS report.
“It is rare to see a competitor come out publicly with a competing bid once a deal is announced, and we think this move by Occidental speaks to the quality of Anadarko’s asset base,” adds Dittmar. “This deal will set a new and important benchmark for future transactions. Those looking to acquire other Permian-centric E&Ps are probably disconcerted to see the competition intensify in the form of aggressive counter offers.”
To review the full Executive Deal Summary report, and to receive new reports within 48 hours of a significant transaction being announced, visit: https://info.drillinginfo.com/products/dealmaker-suite/.
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