Home / 2014’s Booms, Bans, and Busts no. 5: Halliburton buys Baker Hughes, leads acquisition trend

2014’s Booms, Bans, and Busts no. 5: Halliburton buys Baker Hughes, leads acquisition trend

The 2014 year is on its way out, and Shale Plays Media is taking these last two weeks to recap the various major stories that have impacted the world of oil and gas over the last year. On Monday, the Keystone XL was highlighted in an original piece you can view here.

2014 was a big year for the oil and gas industry. From the US becoming the leading oil producer in the world, to oil prices plummeting and causing a panic, it is fair to say a lot has happened. Yet, some of the biggest moments of this year in oil and gas is all of the mergers and company acquisitions that occurred, the top deal being Halliburton purchasing Baker Hughes.

On November 14, Dow Jones reported that Halliburton was considering the idea of purchasing Baker Hughes, which took the world by surprise.

At the time of the announcement, Baker Hughes was reported to be worth an estimated $22 billion, and Halliburton’s value was estimated at $47 billion. Combined, the two would be worth a total of $67 billion, making the revenue of the two companies put together slightly larger than Schlumberger Ltd., who is currently the world’s biggest oil services company.

On November 17 Halliburton announced that it would be purchasing Baker Hughes in $34.6 billion cash and stock deal. The deal is still expected to close during the second half of 2015.

After the merger of the companies, both Halliburton’s and Baker Hughes’ power in North Dakota’s Bakken shale will be solidified; once combined, the companies will hold more than 50 percent of the cementing market and a leading position in fracking.

In news unrelated to the proposed merger, Halliburton announced its new leadership roles. On December 4, the company announced that Mark MCollum will be the new executive vice president and chief integration officer. Then, on December 5, Abdulaziz F. Al Khayyal was appointed to the company’s board of directors.

Halliburton also recently announced 1,000 job cuts from its Eastern Hemisphere. The company claims the cuts are not due to the purchase of Baker Hughes but is the company’s way of dealing with the oil price decline.

With oil prices sliding over the last several months, many other companies have also sold, purchased, merged or spun-off, including Pioneer Natural Resources Co., Mid-Con Energy Partners LLP, TAYO, Anadarko, American Energy, ONEOK Partners, Breitburn Energy Partners, Amec PLC and Foster Wheeler AG, Enterprise Products and Oiltanking, NeoFirma, C&J Energy Services, Exterran, Siemens Energy Inc., Whiting Petroleum, FourPoint Energy and Enervest, Littljohn Co., Nabors Industries Ltd., Energy Texas Inc., EOG Resources Inc., Wood Group, EagleClaw Midstream Services LLC, KWI International LLC, and Linn Energy.

2014 was a big year for sales and acquisition. It will be interesting to see what 2015 has to offer and how oil prices will continue to change the business landscape of the industry

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