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Suncor and Petro-Canada: Is the Merger Genie Out of the Bottle?

This morning Suncor and Petro-Canada announced plans to merge in a stock-for-stock transaction valued at $15 billion.  With the assumption of $3 billion in debt, the total transaction is valued at $18 billion.  This deal is the 5th largest global M&A transaction this year and the 6th largest Canadian deal ever.  It is the 10th largest oil and gas merger ever and the largest energy deal since December 2006 when Norsk Hydro and Statoil ASA agreed to merge in a deal valued at $30 billion. =>Continue Reading

Oil Prices Rally On US Dollar Weakness

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On Wednesday afternoon the Federal Reserve announced its actions following the organization's two day meeting.  The Fed announced it would inject $1.15 billion into the financial system through buying longer dated Treasury bills, more mortgages and more Fannie Mae paper.  On the announcement, the U.S.

OPEC Speaks: Urges Greater Member Compliance With Cut

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The 152nd meeting of the oil ministers of the members of OPEC ended Sunday afternoon with a press release announcing that the organization was urging its members to fully comply with current production quotas.  The press release discussed the reduced global economic projections and their negative impact on oil demand.  =>Continue Reading

Why Are Oil Prices Recovering?

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Thursday oil futures prices jumped by more than 11% taking oil above $47 a barrel.  The futures are up another $0.87 (as this blog is being written) pushing the price close to $48.  So after being hammered on Wednesday when crude oil inventories rose rather than fell as analysts expected, why is crude rising? =>Continue Reading

Marketmakers Energy Conference Presentation

Last Thursday I presented an outlook for the oilfield service industry at a conference in Houston.  Attached are the slides from the presentation.  I did not have a prepared text.

The presentation focused on how dramatically the oil market changed in the fall of 2008, which coincided with Hurricane Ike hitting the Gulf Coast while an economic and financial hurricane was hitting New York.  Those events changed the face of the financial industry and in turn the global energy business. =>Continue Reading

Rig Count Drop Now In New Territory

Friday's release of the Baker Hughes rig count data for North America indicates that this industry correction is now in uncharted territory.  For the week ending March 6, 2009, BHI puts the number of working drilling rigs in the U.S. at 1,170, down 73 rigs from the prior week.  =>Continue Reading

IEA Director Needs More Than Two Hands for Analysis

Nobuo Tanaka, executive director of the International Energy Agency (IEA), was interviewed by the Financial Times (FT) yesterday and said that oil importing countries were receiving a $1 trillion tax break by lower oil prices.  He said that the IEA's analysis showed that if oil prices stay at around $40 a barrel for the balance of this year, the presumed $1 trillion in savings for oil importing countries would help contribute to their economic recovery, which is good in the long term for oil exporting countries. =>Continue Reading

Is WTI About To Become History?

Platts, the division of McGraw-Hill that tracks oil markets and oil prices, announced it plans to launch a new physical oil price marker that it believes better reflects market dynamics in the United States.  The historical measures of oil prices, and in turn the health of the global oil market, have been West Texas Intermediate (WTI) and Brent.  WTI is generally associated with the U.S.

Energy Demand Shows Further Signs of Recovery

Yesterday, crude oil futures fell by more than $4 a barrel to settle at $40.15 as negative economic and financial news sent shivers of fear about future oil demand.  At the same time, the Southeast Asia brokerage firm, CLSA, reported that its monthly survey of Chinese purchasing managers' confidence showed a rise for the third consecutive month.  The improvement in this leading indicator dates back to the implementation of the Chinese government's economic stimulus plan. =>Continue Reading

Roxar ASA Deal Highlights Strategic M&A Alive Despite Credit Crisis

Emerson has agreed to acquire Norwegien oilfield service company, Roxar ASA, for 5.30 crowns, or approximately $179 million.  Shareholders holding 41% of the outstanding shares have agreed to support the transaction.  Emerson will assume $212 million of Roxar debt as part of the transaction.  =>Continue Reading

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