Annual Meeting of the American Institute of Mining, Metallurgical, and Petroleum Engineers, 14–18 February, New York City
In the past few years, the world-petroleum-industry had increasingly felt the-weight of changes in the principal economic factors affecting profits. As a result of theme changes, it has been necessary for many oil companies to acquire certain new facilities in order to strengthen their competitive positions and thereby protect their tremendous investments in crude oil reserves, pipe line facilities, refining operations, and marketing outlets. Principally, these needs have been met by new capital outlays. A supplementary method of acquiring needed facilities, however, has been to obtain existing facilities through complete or partial acquisition oil other companies'properties. It is this method of meeting competitive pressures with which this paper is concerned.
This paper presents a statistical breakdown of the mergers and acquisition which occurred in the oil industry between January 1, 1954, and October 1,1959, showing the frequency with which certain types of properties were acquired in each of the years studied. In addition, it discusses the principal economic conditions which stimulated many of these property transfers, comments on the effects of these mergers on the consuming public, and indicates the types of mergers and the rate at which they may be expected during the next three or four years.
The basic data upon which the statistical analysis presented in this paper is based were taken from several published sources. Obviously they are:somewhat incomplete because not all mergers and acquisitions were reported. However, a careful search was conducted through The Wall Street Journal, The Oil and Gas Journal, Petroleum Week, and The Oil Daily with the result that the data should be reasonably complete and comparable for each of the years studied. It is believed, therefore, that the statistical analysis which follows provides a reasonably accurate indication of the general trend in mergers and acquisitions during the period studied.
Apparent Trends in Mergers
During the period January 1, 1954 to October 1, 1959, there were approximately 519 complete or partial company acquisitions made by 238acquiring companies or individuals, involving solely United States or Canadian properties reported in the trade papers examined. Included in these property transfers were transactions involving common stock mergers, acquisitions of part interests in the common stock of other companies, and purchases of othercompanies' properties. All of the buyers and sellers were engaged in the producing, refining, and/or marketing of crude oil or natural gas liquids either prior to or as a result of these acquisitions.
