Expectations of a record year in domestic transaction volume were fading faster than winter daylight in December despite market pressure to conclude deals in the face of potential 2013 changes to the tax code. Several significant acreage packages that in aggregate would total a Carl Sagan-like “billions and billions” of dollars were still seeking joint-venture partners or outright sale at press time, with potential to impact 2012 volumes.

With less than days left in 2012, announced transaction value for domestic E&P assets year-to-date had moved above $57.4 billion, but was still $12 billion below the $69.5 billion recorded in 2011—and below the record $72 billion recorded in 2010—according to Hart Energy’s A&D Database.

After a somnolent second-quarter 2012 with just $6.2 billion in announced deal value, the transaction pace jumped to more than $17.1 billion in the third quarter, led by $6.9 billion in Gulf of Mexico deals, followed by Chesapeake Energy Corp.’s $3.3-billion Permian Basin divestiture. The transaction trend moved north to the Bakken shale during the first two months of the year’s final quarter where buyers executed $2.3 billion in high-profile deals.

Realigning in the Gulf. Regional realignment appears to be the main theme in 2012. Transactions in the Gulf of Mexico led all regions domestically with $17.9 billion in deal value through mid-December, followed by the Bakken shale and Permian Basin with $6.4 billion and $6 billion, respectively, as deal makers focused on oil targets or executed consolidation strategies.

What set the Gulf apart was deal size. Freeport-McMoRan Copper & Gold Inc. paid $9 billion in cash and stock in December to merge Plains E&P Corp. and McMoRan Exploration Co. into a BHPBilliton-like global mining and oil and gas conglomerate in the largest package deal for 2012. Freeport-McMoRan’s Gulf roll-up came less than 90 days after Plains E&P Corp.’s $5.5-billion acquisition of BP Plc’s deepwater assets in the Marlin, Horn Mountain and Holstein projects in tandem with the purchase of Royal Dutch Shell Plc’s $560-million interest in the Holstein project. Like BHPBilliton, the new Freeport-McMoRan will hold onshore assets in the Haynes - ville and Eagle Ford shales.

Roughly one week after Plains’ September announcement, offshore independent EPL Oil & Gas Corp. purchased Hilcorp Energy Co.’s shelf assets for $550 million, followed a day later by W&T Offshore Inc.’s $228-million purchase of Newfield Exploration Co.’s Gulf assets.

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Permian activity. Third-quarter transactional momentum was not tied to the offshore market alone, however. Onshore, deal makers focused on oilier assets in the Permian Basin and Bakken shale. The headline event in the Permian Basin remains Chesapeake’s divestiture of properties in both the Delaware and Midland basins. In all, Chesapeake’s divestiture involved three packages totaling 21,000 barrels of liquids and 90 million cubic feet of gas per day, or 5.7% of its second-quarter production.

The Delaware Basin holdings brought an estimated $2.9 billion from two supermajors. Royal Dutch Shell executed a return to the Permian Basin with the $1.9-billion purchase of Chesapeake’s Delaware Basin properties in Texas, covering approximately 618,000 net acres and 26,000 barrels of oil equivalent per day, while Chevron Corp. added 246,000 acres, and 7,000 barrels of oil equivalent per day to its existing holdings in the New Mexico portion of the Delaware Basin. Chevron is the second-largest oil producer in the Permian Basin and now holds 700,000 net acres in the Delaware Basin.

EnerVest Ltd. completed the Chesapeake divestiture trifecta by acquiring 166,000 net acres and 3,000 barrels of oil per day in the Midland Basin. Chesapeake will retain 470,000 net acres of undeveloped leasehold in the basin.

Majors move. Farther north, regional consolidation gained momentum in the Bakken with more than $3.4 billion in announced transaction volume during the third quarter followed by $2.3 billion in deals through the end of November. ExxonMobil Corp. led the way through the acquisition of Denbury Resources Inc.’s Bakken shale position spanning 200,000 net acres in North Dakota and Montana. The transaction included $1.6 billion in cash for the Bakken assets, which produced 15,200 barrels of oil per day in the second quarter, plus the trade of ExxonMobil’s position in Hartzog Draw Field in Wyoming and Webster Field in Texas, bringing Denbury approximately 3,600 barrels of oil equivalent per day.

The ExxonMobil deal boosted the supermajor’s presence in the Bakken shale to roughly 600,000 net acres. ExxonMobil has been the nation’s largest natural gas producer after acquisitions in unconventional gas over the past four years and is seeking to balance its portfolio with acreage prospective for liquids.

In all, the majors executed $4.5 billion in domestic transactions during third-quarter 2012, signaling a return to a more active acquisition phase. The majors and international oil companies have spent more than $50 billion in domestic market acquisitions since January 2010 and nearly $44 billion in joint ventures.

More Bakken. Separately, QEP Resources Inc. added to its Bakken shale holdings through the $1.38-billion purchase of properties from multiple owners in McKenzie and Williams counties, North Dakota, followed with the $228-million purchase of 4,765 net Bakken shale acres from Unit Corp. In the first transaction, QEP acquired 27,600 net acres and 10,500 barrels of oil equivalent per day from multiple owners, including Black Hills Corp. and Helis Oil & Gas Co. LLC, with net proved and probable reserves of 125 million barrels of oil equivalent. QEP previously held 90,000 net acres in the Bakken.

Meanwhile, new start-up Halcon Resources LLC bought a portion of Petro-Hunt LLC’s Bakken position in October 2012 for $1.45 billion.

—Richard Mason, Hart Energy