The value of oil and gas M&A activity plunged in August despite a slate of bigger deals that followed a revitalized market.
During the month, the sector announced the same number of whole-company and minority-stake deals compared to August 2019: 32. Year over year, however, the combined value of these deals decreased 57% from $12.7 billion to $5.4 billion.
The aggregate value of announced asset transactions rose slightly from $2.67 billion to $2.68 billion, as the number of deals fell from 40 to 35.
Brookfield Infrastructure Partners LP's acquisition of The Blackstone Group Inc.'s roughly 40% stake in Cheniere Energy Partners LP for $3.5 billion was the biggest deal announced in August and the second-largest whole-company or minority-stake transaction announced during 2020 so far.
Blackstone poured $1.5 billion into the Cheniere Energy Inc. master limited partnership in 2012 to help fund the Sabine Pass LNG export terminal in Louisiana that began commercial service in 2016. Under the agreement, Blackstone's class B units would convert to common units after the third liquefaction train at the facility entered service. In July 2017, Cheniere Energy Partners filed that those shares were converting to 198,978,886 common units to be issued to a Blackstone fund at a value of about $6.34 billion, more than four times what Blackstone originally invested.
Southwestern Energy Co.'s $893.5 million purchase of Marcellus and Utica Shale driller Montage Resources Corp. was August's second-biggest corporate-level deal, but industry observers said heavy debt loads are holding back both buyers and sellers despite the number of cheap assets on the market.
During August, Canadian Natural Resources Ltd. also bought natural gas and natural gas liquids producer Painted Pony Energy Ltd. for $377.3 million.
The biggest asset-level deal that month, meanwhile, was Occidental Petroleum Corp.'s $1.3 billion sale of its Wyoming, Colorado, and Utah land grant assets to Orion Mine Finance.
The independent driller will retain all cash flow from currently producing oil and gas properties in the area, as Orion was targeting what the two sides described as the world's largest trona deposit. Trona is a mineral used to make soda ash, the primary ingredient in baking soda, glass manufacturing and "other critical chemical applications."
Warren Buffett's Berkshire Hathaway Inc. sold off its common equity stake in Occidental in the second quarter as the company neared what veteran oil analyst Paul Sankey called a "bankruptcy whirlpool."