North American property transactions have doubled in total dollar value this decade, according to Randy King, managing director and head, Merrill Lynch Petrie Divestiture Advisors.

There was a low of $3.5 billion worth of these transactions-these exclude corporate deals or mergers-in 2001. In 2006, these totaled $28.9 billion worth. Deal-making this year through late May was running at an annualized pace of $30 billion. And, that estimate excluded the $6.5-billion deal announcement in early June for Dominion Resources oil and gas properties by XTO Energy and Loews Corp., for example.

King spoke to energy executives in Houston at a program on global energy markets at Minute Maid baseball park. Prices paid for North American proved reserves have grown 328% this decade, he added. The low was approximately 60 cents per thousand cubic feet equivalent (Mcfe) in 2000; this year through late May, the average is $2.70.

When viewed in terms of the assets' production, prices paid per flowing Mcfe have grown 280%, from lows of between $3,000 and $4,000 in 2000-02 to more than $12,000 so far in 2007, he added.

His outlook for the balance of 2007? Prices softened a bit in January but improved with higher natural gas prices when winter kicked in. Private capital and public companies' need to grow will continue to place growing value on proved reserves and existing production. "Private capital's sweet spot and public companies are just too large to rely on organic growth alone."

Rising finding and development (F&D) costs are affecting producers' reserve-replacement figures and growth strategies. Resource plays will continue to draw attention. These plays-such as the Barnett shale and coalbed methane-had the lowest F&D costs in 2006, he said.

Publicly held U.S. independents that scored best on F&D are primarily those in unconventional plays: Quicksilver Resources, Ultra Petroleum, Range Resources Corp., XTO Energy Inc. and others. Independents with the highest F&D included several that operate in the Gulf of Mexico: Stone Energy Corp., Energy Partners Ltd. and W&T Offshore.

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