Global oil and gas equipment and services deal activity, including capital markets and Mergers and Acquisitions (M&A), increased in overall value from $563.4 million across 29 deals in February 2015 to $3.2 billion from 38 transactions in March, a rise of over $2.6 billion, according to research and consulting firm GlobalData.
The company’s latest equipment and services deals review states that eight transactions exceeded $100 million in value, accounting for a combined value of $3 billion in March 2015, compared with just two deals in February 2015.
However, acquisitions accounted for 34% of the total equipment and services deal activity in March 2015, in which 13 transactions totaled $142.9 million and accounted for just 4% of the total monthly deal value. This represents a significant drop of 51% compared with $289.5 million in February, which saw 16 deals.
Matthew Jurecky, GlobalData’s Head of Oil & Gas Research and Consulting, says the Americas led equipment and services deals activity in March 2015, as the region accounted for a 56% global share that month, comprising nine deals worth $116.3 million. Of these, five deals totaling $13.3 million were completed, while four, with a combined value of $103 million, were announced.
Jurecky comments: “The top deal in March 2015 was Frank’s International’s agreement to acquire Timco Services, all paid for in cash and taking advantage of depressed asset prices, to expand the company’s core tubular running service in producing areas of the US that are more resilient than others, namely onshore Texas and offshore Gulf of Mexico.”
GlobalData’s report also states that financing through equity offerings, debt offerings, private equity, and venture financing totaled $2.9 billion from 13 deals in March 2015.
Jurecky continues: “Capital raising activity in the oil and gas equipment and services sector is half of what it was at the same time last year. While there was a mild rebound in March since the crude price crashed last year, there have been consistent monthly drops in activity as the market is wary of producers squeezing the margins of these companies.
“Drillers Noble and Ensco were the key players in this activity, issuing long-term debt mainly to cover nearing debt obligations.”