Business Outlook 2019

3.5 Mergers and Acquisitions Deal activity did not reach levels seen in 2017, but there were a number of mergers and acquisitions (M&A) on the UKCS last year. Activity was seen across all aspects of the oil and gas development cycle including exploration prospects, pre-development opportunities, producing fields and late-life assets. While some corporate transactions were seen in 2018, the majority related to the transfer of assets, as companies continued to optimise their portfolios. Having investment opportunities in the most appropriate hands is a key enabler in the drive to maximise economic recovery. The transactions have resulted in a more diverse corporate landscape on the UKCS, with the largest ten companies accounting for just over half of production in 2018, compared with more than two-thirds of production in 2008. Sustained fiscal and regulatory certainty will help to ensure that buyers continue to be attracted to the basin and that opportunities are held by companies with a greater focus on growth on the UKCS.

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Examples of significant transactions announced in 2018 include:

Exploration Prospects and Pre-Development Opportunities

Neptune Energy acquired stakes in the Seagull development opportunity and Isabella exploration prospect from Apache North Sea

Cairn secured a farm-in to the Azinor Catalyst-operated Agar-Plantain exploration prospect

Spirit Energy

Spirit Energy farmed into the Greater Warwick Area, operated by Hurricane Energy

Equinor

Equinor acquired a stake in the Rosebank development from Chevron and assumed operatorship

Shell acquired a stake in the Cambo area from Siccar Point

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