Power & Energy Q4 2022

Industry Trends

OPEC Oil Supply Remains Steady

Despite Western sanctions on Russian oil, the price caps are not expected to impact crude oil supply forecasts. Non-OPEC countries produced 1.9 million barrels per day in 2022, with 1.5 million daily barrels expected in 2023. Increased purchases from Eastern regions have mitigated the Western halt of Russian imports.¹

Oil Companies Expand Renewable Fuels

Shell’s agreement to purchase Nature Energy Biogas is the most recent renewable fuel deal from the world’s largest oil and gas companies. The deal, valued at nearly $2 billion, is the latest billion-dollar renewable deal from the industry in Q4. This trend is expected to ramp up as companies attempt to get ahead in the clean energy transition.²

U.S. Efforts to Curb Energy Prices Bring in $4 billion

During its release period, the Biden Administration sold 180 million barrels of crude oil at an average of $96.25, netting $4 billion above the recent market prices. Strategic sales over the past year contributed to the fall in gas prices from an all-time high in Q2 and Q3. The U.S. may use this to its advantage to restock its oil reserve, which currently sits at 382 million barrels, in case of future supply shocks.³

U.S. Oil Companies Focus on Projects in the Americas

Exxon Mobile Corp and Chevron Corp plan to spend approximately 70% of their annual production budget in North and South America. Projects abroad, mainly in Africa and Asia, have become costly and need to meet the earning expectations of investors. Chevron and Exxon both project spending levels well below the pre-pandemic levels and plan to continue to trim costs with production closer to home.⁴

Nuclear Fusion Makes a Big Breakthrough

A discovery was announced in early December that controlled nuclear fusion reaction produces more energy than it consumes. The breakthrough represents another significant step toward a possible clean energy alternative for the future. The technology will require a great deal of investment in related technologies to reach commercial practicality.⁵

Largest Transactions Closed

Target
Buyer
Value($mm)

Shell Midstream Partners, L.P.
Shell Pipeline Company LP
$1,963.60
PBF Logistics LP
PBF Energy Company LLC
$1,148.17
Exterran Corporation
Enerflex Ltd.
$814.77
Millennium Pipeline Company, LLC
DT Midstream, Inc.
$552.00
EDF Energy Services, LLC
BP America, Inc.
$505.38
862 MW Portfolio of Three Onshore Wind Farms and One Solar Farm in the US
Energy Capital Partners, LLC
$410.00

Other Financial Buyer Transactions Closed

Target
Buyer
Value($mm)

2,000 Net Acres and the Pipeline Gathering Field in Pennsylvania
Arch Energy Partners, LLC
$8.00
Gemini Solar + Storage Project
APG Asset Management NV
n/a
Atlas Renewable Energy USA, LLC
Global Infrastructure Management, LLC
n/a

Other Strategic Buyer Transactions Closed

Target
Buyer
Value($mm)

Five jack-up rigs
Shelf Drilling (North Sea), Ltd.
$375.00
U.S. Well Services, Inc.
ProFrac Holding Corp.
$312.18
Cactus II Pipeline LLC
Enbridge Inc.; Plains All American Pipeline, L.P.
$264.80
14 U.S. solar assets
MN8 Energy, Inc.
$244.50
Romeo Power, Inc.
Nikola Corporation
$175.79

Served as advisor to Zak Incorporated on their acquisition by LAI International and RLJ Equity Partners

Served as advisor to E Energy Adams

Served as advisor to Crane Rental Corporation on their recapitalization by Hammond Kennedy Whitney

Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

Horner, W. “OPEC Keeps Oil Supply Forecasts Steady Despite Russian Oil-Price Cap.” Wall Street Journal, 13 December 2022.
Strasburg, J. “Shell to Buy Biogas Producer in $2 Billion Deal.” Wall Street Journal. 28 November 2022.
Uberti, D. “U.S. Scores $4 Billion Windfall on Oil-Reserve Sales.” Wall Street Journal. 19 December 2022.
Eaton, C. “Exxon, Chevron Focus on Oil Projects in the Americas.” Wall Street Journal. 3 January 2022.
Zumbrun, J. “When Will Nuclear Fusion Energy Be Ready for Prime Time? Watch These Three Numbers.” Wall Street Journal. 16 December 2022.

Power & Energy Q4 2022

Industry Trends

OPEC Oil Supply Remains Steady

Oil Companies Expand Renewable Fuels

U.S. Efforts to Curb Energy Prices Bring in $4 billion

U.S. Oil Companies Focus on Projects in the Americas

Nuclear Fusion Makes a Big Breakthrough

Largest Transactions Closed

Other Financial Buyer Transactions Closed

Other Strategic Buyer Transactions Closed

PCE Transactions

Contacts

Michael Poole

Michael Rosendahl

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OFFICES

Power & Energy Q4 2022

Industry Trends

OPEC Oil Supply Remains Steady

Oil Companies Expand Renewable Fuels

U.S. Efforts to Curb Energy Prices Bring in $4 billion

U.S. Oil Companies Focus on Projects in the Americas

Nuclear Fusion Makes a Big Breakthrough

Largest Transactions Closed

Other Financial Buyer Transactions Closed

Other Strategic Buyer Transactions Closed

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PCE Transactions

Contacts

Michael Poole

Michael Rosendahl

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