Over the past few years, M&A headlines have been dominated by foreign companies acquiring US shale acreage positions. How has this affected the overall landscape of the industry, and which countries, other than the US, exert the greatest influence over it? Evaluate Energy’s shale play database, with its comprehensive list of acreage holdings, has the answer.
Source: Evaluate Energy Shale Play Database
It is clear that European companies have a great influence on the industry. A very high percentage of the foreign owned lands are split between three companies, powerhouses of global oil and gas: BP, Royal Dutch Shell and Norway’s Statoil. BG Group, French major Total and Italian giant ENI also have interests, but it is the aforementioned group that have made the most significant mark. The other point to note here is that a high majority of these positions are operated, so their control over their acreage is higher. This is something you will not find with the majority of other foreign investors, who have mainly moved into non-operated positions to gain experience for their own domestic ambitions – something Poland’s PKN Orlen is attempting to achieve in Canada with its acquisition of TriOil Resources.
If we now remove the European contingent from the results, we can get a clearer picture of the other companies from other countries that have entered the industry.
Source: Evaluate Energy Shale Play Database
The high profile, multi-billion dollar deals that have been struck over the past 18-24 months with Chinese and Indian companies made big headlines, and will probably be among the first things that come to mind when the topic of “Foreign owners in US Shale” is brought up. However, the countries are not very prominent this chart as a whole, and in China’s case, hardly on the left hand side at all, i.e. the five more established, producing plays in the chart. It is in fact Canadian companies and, perhaps more surprisingly, Australian companies that appear to hold the greater influence, and cover a greater spread of the plays on offer.
China, mainly via CNOOC and Sinopec, does have large positions in the more undeveloped plays, Niobrara, Tuscaloosa Marine and the Utica, but of the established plays, it only has a position in the Eagle Ford. Perhaps having arrived a bit late into proceedings, the goal for China is to be there at the beginning when the next big oil play really takes off. India, via four of its own bigger companies (GAIL, Indian Oil Corp, Reliance and Oil India), holds a combined medium-sized position in the Marcellus and Eagle Ford, but in the whole picture displayed by the above chart, Indian companies’ acreage holdings are small.
Australian companies have positioned themselves almost exclusively where the production is, the plays on the left hand side of the chart. Of course, as the Top 10 table below shows, a large proportion of this is made up by BHP Billiton alone. However, it is the other Australian companies that are really interesting, as they are a bit different to your “typical” non-American shale acreage owner, making Australia a very unique entity in this study.
The Australian companies involved, with the exception of BHP Billiton, are much smaller than the other companies in the study, and the motivation is solely to boost profit margins. China and India, for example, are both represented by their biggest and arguably “more famous” companies and there are only a few of them with reasonably large positions (see Top 10 table below). Australia is represented by a grand total of eight companies other than BHP. Six of these are present in the Eagle Ford, holding roughly 16% of Australian-controlled acreage in the play (~64,000 acres), and only one – Aurora – has a market cap of over US$1 billion, standing the country’s representatives in stark contrast to their Chinese and Indian counterparts.
Source: Evaluate Energy Shale Play Database
This report was created using Evaluate Energy’s North American shale play database. The shale play database has a comprehensive list of publicly available company acreage holdings, capex budgets, drilling plans and average well costs, as well as play-related metrics such as production per day and undeveloped land cost per acre. Evaluate Energy provides clients with efficient data solutions to oil and gas company analysis, with its 20+ years of financial and operating data, and its extensive M&A and global assets databases.
Notes:
1) The plays included in this study are the Bakken (US), Eagle Ford, Fayetteville, Haynesville, Marcellus, Niobrara, Tuscaloosa Marine (TMS) and Utica (US). The Barnett play in Texas has not been included, foreign ownership is not high here, and Total, one of the major foreign players, do not report their acreage position.
2) BP does not report Haynesville acreage, despite having a position in the play.
3) All acreage data correct to last available and updated figure, as of August 2013.
