Thursday, February 9, 2012

Oil mergers, acquisitions total $9.9 billion in region last year

By Mark Jaffe
The Denver Post


The prospect of large oil reserves in Rocky Mountain shale and tight-sands formations generated nearly $10 billion in merger- and-acquisition deals in the region in 2011, according to two studies released Wednesday.

The $9.9 billion in deals represents a 32 percent increase over 2010, according to a study by accounting and consulting firm De- loitte LLP.

"It is clear people are really focused on these oil-rich plays," said Roger Ihne, Deloitte's Mid-Americas portfolio leader.

The biggest draw in the region is the Niobrara shale formation, which stretches from El Paso County into Wyoming, said Pete Stark, a vice president with consultant IHS.

"The little guys and some larger independents developed the resource," Stark said. "They 'derisked' the play. Now the big companies with resources to develop hundreds or thousands of wells move in."

Denver and Colorado will be a focal point in that development, according to consultant PricewaterhouseCoopers.

"Rocky Mountain deals were of particular focus for many energy companies throughout 2011," Rowena Cipriano-Reyes, a Denver-based PwC partner, said in a statement.

"With Colorado's geographical convenience and proximity to booming oil and gas markets, companies will remain drawn to this region in 2012," Cipriano-Reyes said.

In 2011, there were 191 deals nationally with values greater than $50 million, accounting for $186.5 billion — a 35 percent increase over 2010, according to PwC.

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