Identifying A&D trends in the oil and gas industry

Today, Apache announced that the company signed a merger agreement to purchase Mariner Energy for $2.7 billion in an effort to gain its deepwater Gulf of Mexico assets.

See the full story in today's coverage of Apache's purchase of Mariner Energy on PennEnergy .

Yes, Mariner produces some 63,000 boe/d and holds 181 million boe in proven reserves. Also, the company boasts just under 100 deepwater GOM blocks with seven discoveries currently under development and 50-plus prospects.

Nonetheless, this along with other recent company acquisitions and land grabs, including the $1.05 billion Apache plunked down to snag Devon Energy's Gulf of Mexico assets (story appeared April 12), begs me to ask:

Is the merger and acquisition trend that, yes, usually occurs during this part of the business cycle (a.k.a. when prices are low, but prospects of recovery are high), being augmented by a changed attitude in the US administration?
In other words, has our current administration's wishy-washy, uninformed attitude about this nation's natural resources and our dependence on foreign countries for oil, tainted the next two years of MMS lease sales?

Most that follow the Minerals Management Services' Gulf of Mexico lease sales know that investments in our waters has dwindled in the last couple of years. (And oil and gas royalties collected from onshore and offshore leases are one of the nation's biggest non-tax revenue generators.)

One reason for the loss in eye-popping investments in the waters of the US Gulf of Mexico could very likely be the uncertainty in oil and natural gas prices has kept producers from investing in new ventures. As stock prices have dropped across the board, companies have retreated inward, focused on the properties that were already in the works, whose budgets were already approved before the drop in the price of oil

Yes. But I wonder, is there something else at play?



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