Foreign investors are emerging as the biggest beneficiaries of the unfolding U.S. energy revolution—underscoring how the landscape is being dominated by small, nimble players profiting where oil majors seemingly cannot.
According to a quarterly analysis by PriceWaterhouseCoopers, private equity firms, and especially foreign buyers, are large investors in the U.S. oil and gas story, having executed nine deals worth $2.8 billion during the third quarter. This year, international buyers have done 33 percent more deals even as overall deal value has dropped—suggesting buyers are getting bargain prices.
The urge may be there to snap up smaller and more nimble oil producers, but analysts say the domestic Big Three are encumbered by sprawling size and underperforming assets that make acquisitions less likely.
Buyers now are more diverse than the usual suspects from the Middle East, according to Doug Meier, PWC's mergers and acquisitions energy deals leader.
"Out of these transactions that involve a foreign component, it's interesting that Canada and Asia-Pacific are kind of leading the way," Meier said in an interview, adding that much of the activity is concentrated in the exploration and production, or "upstream" sector.
"We continue to see foreign acquirers playing a significant role in the number of value deals announced," he added.