Slide

1. GLOBAL E&P TRANSACTIONS
H1 2012 REVIEW
Slowdown continues, deal value trending four-year low
JULY 2012
This document is joint property of Derrick Petroleum Services and PLS. References and citations to the document are encouraged but distribution or copying in any forms, in parts or full require
permission from the owners. The information and analyses presented in this document are based on proprietary data contained in Derrick Petroleum Services’ Global E&P Transactions Database and
general industry and company research. The document is not intended to be used on a stand-alone basis but in combination with other material or in discussions and is subject to revisions. Derrick
Petroleum Services and PLS are not responsible for actions taken based on information in this document.

2. Slowdown continues, deal value trending four-year low
Slowdown continues, deal Global M&A deal values in H1 2012 stood at $62 billion which included only $25 billion in Q2 2012 – one of the
value at four-year low lowest quarters since Q3 2009. The annualized deal value run rate at $124 billion, is higher only than the $117
billion seen in 2008. Number of large value deals (>$100 million) in Q2 2012 was stable at 44, in line with the
previous 5 quarters.
US remains top region, United States with $29.2 billion or 48% of total upstream deal value, continued to be the top region during H1
Canada’s share at a record 2012. Canada maintained its second position with deals worth $17.1 billion or 28% of the total upstream deal
high value in H1 2012, surpassing its full year 2011 value.
Corporate deals steady during Corporate deals and transactions involving producing fields accounted for 46% and 30%, respectively of the
H1 2012, Increased focus on total deal value in H1 2012, in line with deals in 2010 and 2011. 86% of the Corporate deals weighted towards
Gas assets Gas assets including Oil + Gas and CBM.
M&A in Conventional assets In H1 2012, share of conventionals in the total deal value was 46% – dropping below 50% for the first time
falls below 50% since 2007.
Chinese remain silent in H1, The share of acquisitions by Chinese NOCs was relatively lower at 4% of the total deal value in H1
Asian NOCs on big ticket 2012, whereas the share of Asian NOCs jumped with Petronas, KNOC and PTTEP joining the acquisition
acquisitions spree. The Chinese are making a come back with CNOOC set to takeover Nexen for $17.9 billion and Sinopec
acquiring Talisman’s North Sea assets for $1.5 billion, both in July 2012.
Supply of assets crosses $100 The total value of all oil and gas assets currently on the market (Deals in Play) was $105 billion at the
billion, BP’s stake in TNK-BP beginning of July 2012, 19% higher than the supply at the beginning of April 2012 and marginally above $101
for sale billion at the beginning of 2012.
2

3. Global upstream M&A slows down considerably
211 Kinder Morgan – El
In Q2 2012, the total upstream Value of global E&P transactions Paso E&P assets
M&A deal value reached $25 USD billion 7.2 176*
billion. This is the lowest since 71
150 169
Q3 2009 ($19 billion) and is 147
comparable to the slow quarters 48
such as Q4 2008, Q1 2008 and 37 117
66 44
Q1 2007. In H1 2012, the total 19
deal value touched $62 34 47
billion, 17% lower than $74 billion 43 19 46 62
in H1 2011. The annualized deal 32
value run rate at $124 billion, is 61 32 25
33
only higher than $117 billion in
50 43
2008. 23
33 36
15
Q1
Q2
Q3
Q4
Q2
Q3
Q4
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q3
Q4
Q1
Total
Q1
Total
Q1
Total
Total
Q2
Total
Q2
H1
Number of large value deals
(>$100 million) was stable at 44
in Q2 2012 and in line with the * Including the value of El Paso E&P assets First Half of the year
previous 5 quarters. Of the 44
high value deals in Q2 2012, only
5 were greater than $1 billion – Number of transactions, split by high and low value deals
the lowest since 2009. High Value Deals (>$100 million) Low Value Deals (<$100 million) Undisclosed deal value
134
The number of low value deals 134
(<$100 million) and deals with 96 123 114
86
undisclosed values were 93 and
97, respectively, declining in line 77 82 85
90 74 97
with the overall slowdown 90 87 71
86 96 75
observed during this quarter. 65
130 178
61 167 155 145 139
64 111 101 106
92 85 117 90
89 48 99 93
85 75 85
44 70
44 69
47 53 43 50 47 42 54 59 49 42 49 47 49 50 44
31 38 24 35 36
18
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2007 2008 2009 2010 2011 2012
3

4. Top 20 global deals - corporate deals continue to dominate
The largest deal of H1 2012 was Value of top 20 global E&P transactions in H1 2012
the divestment of El Paso’s E&P
assets by Kinder Morgan to a USD million
Kinder Morgan divests El Paso's E&P assets 7,150#
consortium of Private Equity
investors led by Apollo Petronas acquires Progress Energy Resources 5,386#
Global, Riverstone, Access
Industries and KNOC for $7.15 Mitsubishi acquires 40% in Encana's Cutbank Ridge 2,898
billion. Overall, the top 10 deals Apache acquires Cordillera Energy 2,850#
accounted for nearly half the total
deal value in H1 2012. Devon and Sinopec form JV for five unconventional plays in US 2,200
Mitsubishi and Mitsui acquire 14.7% in Browse LNG from Woodside 2,000
Other significant deals in the US
included Apache acquiring Pengrowth Energy acquires NAL Energy 1,909#
Cordillera for $2.85 billion and
Devon and Sinopec forming a JV PTTEP to acquire Cove Energy 1,756#
across five unconventional plays
ConocoPhillips divests Vietnam assets to Perenco 1,290
in US for $2.2 billion.
SandRidge acquires Dynamic Offshore Resources 1,275#
Prominent deals in Canada
include Petronas acquiring Linn Energy acquires BP's Kansas assets 1,200
Progress for $5.39 billion and Halcon Resources acquires GeoResources 1,031#
Mitsubishi acquiring 40% interest
in EnCana's Cutbank Ridge Linn Energy acquires Wyoming property from BP 1,025
assets for $2.9 billion.
Three Rivers divests Permian basin assets to Concho Resources 1,000
International deal activity was SPDC divests interest in OML 30 to Shoreline and Heritage 850
seen across Australia, East
Africa and Vietnam - Mitsubishi Marathon Oil acquires Paloma Partners II LLC 750#
and Mitsui acquired 14.7% in
Chesapeake sells Texas Panhandle Granite Wash VPP 745
Browse LNG for $2
billion, PTTEP acquired Cove Harvest Natural Resources divests Venezuela assets to Pertamina 725
Energy outbidding Shell, and
ConocoPhillips divested its ENI sells 5% stake in Galp to Amorim Energia 713#
Vietnam assets to Perenco for Athabasca Oil Sands divests 40% in MacKay River project 667 # Corporate Deals
$1.29 billion.
4

5. Regional M&A activity – Canada’s share at a record high
1.9
United States, with $29.2 billion Annual transaction value by region 9.4
or 48% of total upstream deal 9.9
USD billion
11.8
value, continued to be the top
region during H1 2012. US was 2.9
32.1
also dominant during 2011 with 9.5
0.7 1.6
deals worth $82.8 billion 7.6
11.5
15.5
accounting for 49% of the total 29.0 13.0
deal value. 35.7 19.9
12.6
2.5 7.2
20.6 14.8
Canada maintained its second 7.0
9.4 6.5 35.0 16.8
position with deals worth $17.1
34.8
billion or 28% of the total 3.1 3.2
35.4 9.1
upstream deal value in H1 1.8 0.9
15.3
2012, surpassing its full year
82.8 2.6 3.3
2011 value. Overall, the share of 75.2 17.1
Canadian deals is at the 61.6
49.6 47.5
highest, nearly tripling from 10% 29.2
during 2011.
2007 2008 2009 2010 2011 H1-2012
North Sea/Europe, at the third
United States Canada North Sea/ Europe South/Central America Former Soviet Union Asia Africa Australia Middle East
position, totalled $3.3 billion from
28 deals with the highest
contributor being Cairn’s offer for
Nautical Petroleum. Annual transaction value % by region
USD billion
Africa, Australia and Asia saw
large deals such as PTTEP’s 2007 2008 2009 2010 2011 H1-2012
acquisition of Cove, Mitsubishi 100%=$147Bn 100%=$117Bn 100%=$150Bn 100%=$211Bn 100%=$169Bn 100%=$62Bn
and Mitsui’s acquisition of 14.7%
5% 5% 5%
in Browse LNG, and Perenco’s 10% 6%
6% 5%
7%
acquisition of ConocoPhillips’ 18%
24% 34% 36% 8%
Vietnam assets, respectively. 6% 41% 13% 41% 15% 5%
49% 48%
7%
7%
5% 14% 28%
6% 24% 23% 16% 9%
8% 13% 10%
5

6. Corporate deals steady during H1 2012, Increased focus on Gas assets
Corporate deals and transactions Deals by type of transaction
involving producing fields
accounted for 46% and 2007 2008 2009 2010 2011 H1-2012
30%, respectively of the total 100%=$147Bn 100%=$117Bn 100%=$150Bn 100%=$211Bn 100%=$169Bn 100%=$62Bn
deal value in H1 2012, in line
with the trend observed in 2010 7% 7% 5%
8% 10%
7%
and 2011.
26% 15% 21% 20% 14%
37% 33% 42% 47% 46%
86% of the Corporate deals were
weighted towards Gas assets 48% 32% 73% 31% 28% 30%
including Oil + Gas and CBM.
Mitsubishi was involved in
Corporate M&A Producing fields Fields under development Discoveries (Undeveloped) Mix of asset types
acquiring interests in two fields
under development, EnCana's Corporate deals with transaction value >$1 billion
Cutbank Ridge assets and
USD million
Woodside’s Browse LNG project.
Kinder Morgan divests El Paso's E&P assets 7,150
Petronas acquires Progress Energy Resources 5,386
Apache acquires Cordillera Energy 2,850
Pengrowth Energy acquires NAL Energy 1,909
Gas
PTTEP to acquire Cove Energy 1,756
Oil + Gas
SandRidge acquires Dynamic Offshore Resources 1,275
Halcon Resources acquires GeoResources 1,031
6

7. M&A in Conventional assets falls below 50%
In H1 2012, the share of Share of conventional and unconventional deals
conventionals in the total deal
value was 46% - dropping below 2007 2008 2009 2010 2011 H1-2012
50% for the first time since 2007. 100%=$147Bn 100%=$117Bn 100%=$150Bn 100%=$211Bn 100%=$169Bn 100%=$62Bn
During H1 2012, of the 94 deals 6% 6%
15% 14%
with a transaction value >$100
million, the number of deals 22%
involving conventional assets (59 90% 24% 60% 34% 51% 68% 39% 57% 50% 46%
deals) was significantly higher
than that of deals involving
unconventional assets (35
deals). But deals >$1 billion were Conventional Shale/Tight Gas Oilsands CBM
distributed equally, at 7 each for
conventional and unconventional.
Number of deals with transaction value >$1 billion
For unconventional deals >$100 39
million, US outpaced Canada Conventional
both in terms of volume and total
Unconventional
deal value. The number of deals
in US and Canada totalled 24 31
and 10, respectively, and the
total deal value was $21 billion
and $11 billion, respectively.
19 19
18
15
14
11
7 7
6
3
2007 2008 2009 2010 2011 H1-2012
7

8. NOC acquisitions continue, Petronas and PTTEP join
In H1 2012, Asian NOCs, namely Acquisitions by Chinese and other Asian NOCs Sinochem
Petronas, KNOC and USD billion CNPC (China)
PTTEP, joined their Chinese ONGC (India)
peers in high value deals. 3.1 Sinopec (Listed)
PTTEP (Thailand)
KNOC joined Apollo 2.5 GAIL (India) Ltd
Global, Riverstone and Access
2.3
Industries in acquiring El Paso’s CNPC (Petro-China)
1.7
E&P assets. Large NOC deals Petronas
included Petronas’ acquisition of 4.1 KNOC (KOREA)
Progress Energy, PTTEP 1.1 CNOOC (China)
outbidding of Shell for Cove 0.8
3.0 China Investment Corp
Energy, the formation of the 7.4
Sinopec
Sinopec-Devon JV for five US 5.2 3.3
unconventional plays and 0.8
CNPC’s (Petro-China) 4.3
4.7
acquisition of 40% in the MacKay 2.8 1.8
River project. 0.8 0.7
1.8 15.2
5.4
2.7 11.2
The share of acquisitions by 8.5
Chinese NOCs were relatively 1.4
lower at 4% of the total deal 2.6 2.2
value in H1 2012, whereas the 2007 2008 2009 2010 2011 H1-2012
share of Asian NOCs jumped.
The Chinese are making a come
back, with CNOOC set to 2007 2008 2009 2010 2011 H1-2012
takeover Nexen for $17.9 billion 100%=$147Bn 100%=$117Bn 100%=$150Bn 100%=$211Bn 100%=$169Bn 100%=$62Bn
and Sinopec acquiring 1% 6% 3% 3% 3%
Talisman’s UK North Sea 5%
12% 15% 11% 14%
business for $1.5 billion, both in 4%
July 2012.
99% 90% 85% 82% 86% 82%
Asian NOC Chinese NOC Others 0%
0% 0%
8

9. Supply of assets back at $100 billion+, BP’s stake in TNK-BP for sale
The total value of all oil and gas ExxonMobil to exit Block 31 in Angola Chesapeake seeks JV partner for Mississippian play
assets currently on the market BP to sell certain UK and Norway North Sea assets and Bakken/Three Forks acreage
(Deals in Play) was $105 billion including 18.36% in Draugen field Chesapeake to sell acreage in Utica and Michigan
at the beginning of July 2012, ConocoPhillips to divest assets worth $5-10 billion Chesapeake to divest Permian basin assets
19% higher than the supply at Eni to sell interest in Mamba gas discovery offshore EOG Resources to sell non-core assets
the beginning of April 2012 and Mozambique Marathon to sell minority stake in GoM
marginally above $101 billion at
Lukoil seeks partner for West Qurna-2 project Newfield Exploration to divest GoM assets
the beginning of 2012.
Maurel & Prom, Svenska Petroleum and EnCana seeks JV partner to develop four
The higher value of Deals in Play Calvalley Petroleum put up for sale unconventional plays
Angola
in Q2 2012 is on the back of BP’s Marathon to divest 10% interest in 6% EnerVest and EV Energy seek JV partner
plan to divest its 50% stake in Block 32, offshore Angola Argentina for Utica acreage
TNK-BP, estimated to fetch a Itera to divest strategic stake 7%
mammoth $20 billion. Tullow Oil to divest Asian United States Cenovus Energy seeks JV partner to
assets 23% develop Alberta oilsands assets
Regionally, US offers the largest Australia
RWE to sell Egypt assets 11% Koch Industries seeks partners for
value of Deals in Play followed Alberta oilsands properties
by Russia, Canada, Australia, 100% = $105 billion
BP to sell 60% stake in Shell to divest Orion oilsands
Argentina and Angola.
Pan American Energy project
Ecopetrol to sell certain Canada Others Talisman to sell non-core assets
Notable deals in play announced 16%
Colombian assets 19% Apache to divest certain Canadian
during the last quarter included
Petrobras’ interests in deepwater BPZ to farm-out interest conventional assets
BP's stake in
GoM blocks and ConocoPhillips in Peru and Ecuador assets ConocoPhillips to divest certain assets
TNK-BP
planning to exit Nigeria. 18% in Alberta and British Columbia
Rosneft seeks partner to develop Connacher Oil and Gas, WestFire Energy
Carabobo oil block and Fairborne Energy consider strategic alternatives
Vale to divest oil and gas assets EnCana seeks JV partner for unconventional gas
Shell to divest remaining stake in Woodside
Origin Energy and ConocoPhillips to sell additional stake in Queensland’s APLNG project
Beach Energy seeks partners for Cooper Basin shale gas project
Dart Energy seeks partners for Australian CBM assets
InterOil seeks partners for Gulf LNG project in PNG
9

10. CONTACT DETAILS
Derrick Petroleum Services is an independent oil and gas research PLS, Inc. is a leading industry research, transactions and
and consulting firm based in Bangalore, India. The Company’s advisory firm based in Houston, Texas. PLS publishes
research and databases have worldwide coverage, with special various information reports on mergers, acquisitions,
emphasis on emerging plays and international transactions. divestments, capital markets, exploration, drilling and
midstream services and manages a multiple listing
service for assets on the market.
Contact person (Asia) Contact person (Europe) Contact person
Yashodeep Deodhar Anders Wittemann Ronyld Wise
yashodeep@derrickpetroleum.com anders.wittemann@derrickpetroleum.com rwise@plsx.com
+91 98 456 55034 +47 9160 6475 +1 713 658 9421