E&P companies spend $7-bn in next gen oil & gas technologies

New technologies to enhance exploration and production (E&P) of oil and gas have attracted $7 billion in funding since 2003, according to Lux Research, as waves of innovation have opened up new kinds of plays in shale gas, tight oil, and heavy oil.
 
The years 2010 to 2013 witnessed a surge in megadeals led by Larcina Energy, underlining investor enthusiasm. In terms of dollar amounts, investment peaked in 2011 at $1.6 billion, while deals hit a high in 2013 with a record 77 unique transactions.
 
North America’s booming oil and gas market was the runaway leader, driven by unmet needs in tight oil/shale gas and heavy oil. It accounts for 76% of the 377 transactions during the period, and 87% of investment dollars. Europe was next with $770 million raised from 107 transactions, on the strength of its evolving deepwater sector, primarily in the North Sea.
 
“Unlike in the past, the oil and gas industry now embraces emerging technologies from adjacent industries. We expect an uptick in M&A activity as companies improve their financials and start to eye technologies – from companies such as Acoustic Zoom, Robotic Drilling, Liquid Robotics, and Field Upgrading – that can enhance existing industry processes,” said Daniel Choi, Lux Research Analyst and the lead author of the report titled, ‘Investing in next generation oil and gas technologies.
 
Technology developers in E&P rarely go public – they simply get acquired, notably by oilfield services companies. Schlumberger has been the most prolific buyer with 56 acquisitions of E&P developers, over 40% of the total acquisitions in this space between 2003 and 2013.
 
The Norwegian private equity firm Energy Ventures is the most prolific investor in E&P technology, with an extraordinary 47 transactions since 2003. Operator-owned investment funds, led by fund Chevron Technology Ventures is the second largest investor with 33 deals.