In a news release published on Tuesday, consultancy Wood Mackenzie reported that following the closure of several multi-billion dollar deals, the value of the mergers and acquisitions of US oil and gas projects in the Permian basin this year has hit a record of over $100 billion.
The list of deals includes the massive $60-billion proposed pickup of Pioneer Natural Resources (PXD.N) by Exxon Mobil, and Chevron’s $53-billion agreement for Hess.
It also included the $4.5 billion bid for Earthstone Energy by Permian Resources, as well as the $4.3 billion pickup of three Permian Basin operations by Ovintiv, and the $4.7 billion spent by Civitas Resources for two private-equity owned properties in the Permian, Hibernia Energy III and Tap Rock Resources assets.
The Permian Basin is an excellent choice for energy companies looking to increase their production. Occupying the space between Texas and New Mexico, it offers a highly productive shale oil output, as well as large undeveloped reserves and extensively developed infrastructure.
The purchase of CrownRock by Occidental, announced on Monday, mean Occidental will become the sixth producer in the lower 48 capable of producing 1 million barrels of oil-equivalent per day. The others are Chevron, EOG, ExxonMobil, EQT and ConocoPhillips, according to Wood Mackenzie.
Looking just at the Permian, Occidental will be one of the top three producers, producing more oil and gas pro-forma than Pioneer had, when its sale was announced.
Vice president of upstream research at Wood Mackenzie, Robert Clarke, said, “This transaction cements an absolute banner year in Permian acquisitions and divestments spend. Coupled with other mega 2023 deals like ExxonMobil and Pioneer, it solidifies Permian scale and multi-decade longevity as a ‘must have’ trait for US Majors and Super-Independents.”
According to Wood Mackenzie, the sum of all the mergers and acquisitions this year in the Permian hit the highest point it has reached since the $65 billion spent in 2019, when there was the $38 billion acquisition of Permian rival Anadarko by Occidental Petroleum Corp.
