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Energy headlines you should know

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Getty Images

Despite opposition, ISIS makes more than $50M a month from oilfields

Despite US diplomacy, ground fighting and airstrikes, crude from oilfields under the Islamic State of Iraq and Syria (ISIS) control still generate up to $50 million per month for the extremist group, its largest source of income.

According to the US and Iraqi intelligence sources, this is the main reason why the so-called ‘caliphate’ has been able to maintain power across parts of Syria and Iraq. The money allows them to fund infrastructure and guarantees the loyalty of its fighters. ISIS has even been able to bring in technical expertise and equipment from abroad to keep the oil flowing and, as a result, the US has been making efforts over the last couple of months to stop this. (Read full article)

ConocoPhillips suffers biggest earnings loss since ’08 crash

ConocoPhillips reported its widest quarterly loss in more than six years as a crash in oil and natural gas prices tempered growth from Texas to Canada.

The largest major U.S. oil company without refining operations said it further reduced 2015 spending by $800 million for an anticipated total of $10.2 billion. ConocoPhillips lost $1.07 billion, or 87 cents a share in the third quarter, compared with a gain of $2.17 a share a year earlier, the Houston-based company said in a statement Thursday. It was the biggest loss since the fourth quarter of 2008. (Read full article)

The reason midstream mergers are booming

Dealmaking among companies that process, store, and transport oil and gas reached $63.5 billion in the third quarter, accounting for more than two-thirds of mergers and acquisitions activity in the U.S. energy sector, according to a new report by Pricewaterhouse Coopers.

The so-called midstream has seen significant M&A activity over the past two years as master limited partnerships have scooped up companies. What has changed recently is the size and nature of the deals as midstream players try to get bigger and defend or increase distributions and dividends in a period of declining U.S. production, PwC’s Doug Meier told CNBC. (Read full article)

The Buyer-Seller Gap: Oil & Gas Acquisitions Report

*(There are hundreds of ways to find value in an asset. In this article, in order to illustrate the gap, we use a monthly forecast and an estimated barrel price.)

As the third quarter reports start to arrive this week, the world outside of oil and gas will see how hard this industry has been hit. There will be talk of acquisitions and non-core divestitures, however, for the majority of the field, the gap that exists between the buyer and the seller is still extensive.
Oil and gas companies that are considering an acquisition strategy are using the days strip price, rounded to the nearest dollar. Whereas the average seller’s baseline barrel price is, on average 16% higher than strip pricing. (Read full article)

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