M&A likely to pick up in 1H18 following relatively dormant 2H17    Despite an oil price north of $60/bbl, we anticipate that the majority of ourcoverage stands firm (for the most part) on their 2018 capital outlook basedon a $50-$55/bbl environment. That having been said, we note some operators(EOG/MRO) projecting to generate FCF ($1.2bn/$600mm at DB deck $56/$62 WTI/Brent), have healthy balance sheets (ND/Cap     With ~$4bn of incremental cash flow at $60/$65, acreage pickups more likely    While upstream operators have stressed capital discipline over the last couplemonths, an oil strip >$60/bbl provides a bit more flexibility for operators,particularly those with healthy balance sheets and who were already projectedto be generating FCF in our base case ($56/$62 WTI/Brent). Relative to peeraverages of ~22/17 years of Permian/onshore US shale inventory depth, MRO andEOG offer 21/9 and 5/13, respectively. Both operators project to be FCF positive(~$600mm/$1.2bn), and maintain healthy balance sheets (~19%/17% ND/Cap)relative to peers (~31% avg). We count 6 Permian Delaware packages currentlyon the market, with BHP's ~100k net acre position being far and away the largest.    Valuation and Risks    Companies in our integrated/large-cap space are valued on either a EV/DACFmultiple (CVX.N, XOM.N, COP.N, and OXY.N or on a blended NAV, EV/DACFmultiple methodology. NAVs assume $65/bbl, $57/bbl, and $3.25/mcf for Brent,WTI and Henry Hub pricing resp. Primary downside risks include a decline inglobal oil demand and a decrease in the underlying commodity. Upside risksinclude increased demand and increased operator efficiency.    2H17 M&A activity volume steady, aggregate value ($13bn) dips by 66% vs.1H17    Aggregate M&A activity totaled just $13bn combined in 2H17, relative to a $21bn/$17bn total for 1Q17 and 2Q17, respectively despite the number of deals (18/19in 3Q/4Q) remaining consistent (20/16 in 1Q/2Q). As oil prices reached a relativebottom in the low $40s in 3Q and investor bases clamored for increased capitaldiscipline and shareholder return. Larger, public operators continue to exit majoroil basins (Bakken/Eagle Ford) yielding the properties increasingly to smaller,private investors. A robust quarter of Marcellus focused activity in 2Q17 came toa halt as natural gas focused transactions totaled just ~$400mm in 2H17, vs. >$10bn in 2Q17 (largely driven by EQT-RICE and NBL asset sale).

声明：如本站内容不慎侵犯了您的权益，请联系邮箱：wangshiyuan@epins.cn 我们将迅速删除。