Acquisitions have traditionally been measured by their fungible assets, such as associated production-the price per flowing barrel of oil equivalent (BOE). And this metric is setting new records in the U.S. For example, Whiting Petroleum's planned purchase of most of Celero Energy's West Texas and Oklahoma assets is at an average price of more than $100,000 per flowing BOE. More often, deals are broken down by the associated proved, probable and possible-or 3P-reserves. In that category, new U.S. records are being set as well. Houston-based Randall & Dewey reports that first-half 2005 average prices paid for U.S. proved reserves were $11.53 per BOE. (For more on this, see "U.S. M&A" in this issue.) In Canada, the first-half average was C$14.84 for proved plus probables, according to Sayer Securities Ltd. (See "NewsWell" in this issue.) In both cases, the figures are double that of just a few years ago. Third-quarter averages are bound to be higher. Mariner Energy plans to pay $20.40 per proven BOE for Forest Oil's Gulf of Mexico assets. (See "Company Briefs" in this issue.) And, at press time, Norsk Hydro announced a bid for Spinnaker Exploration for $41.29 per proved BOE. Yet, coming soon may be an additional way to measure the value of North American acquisitions-whether people come with them. Not long ago, having to lay off employees was put in the merger-liability column in corporate transactions. Today, gaining personnel may be a bonus. Call it the fourth "P." Chevron Corp. mentions Unocal's employees several times in its announcement of the merger closing. David J. O'Reilly, Chevron chairman and chief executive, says, "Chevron has proven technical and financial capabilities to maximize the full value of Unocal's world-class assets, and Unocal's talented employees worldwide will enhance our organizational capability." Chevron is retaining more than 5,000 Unocal employees, and has made employment offers to most of the 1,400 others. For more on this, see the October issue of Oil and Gas Investor. For a subscription, call 713-993-9325 Ext. 126.
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