Learn more about Hart Energy Conferences
Get our latest conference schedules, updates and insights straight to your inbox.
Investor pressure has E&P companies prepping for deals but waiting for an improved market. Despite the rise in WTI prices, many companies' market values have lagged behind the recovery, particularly in the Permian. The market continues to punish companies that make large deals, according to Hart Energy Senior Editor Darren Barbee. Sources told Barbee they are helping companies to make new deals, but for now, they are biding their time.
There were 13 deals in the Permian during the first quarter totaling $11.3 billion dollars, highlighted by Concho’s acquisition of RSP in an all-stock deal valued at $9.5 billion. The second quarter saw deal value in the Permian at $6.14 billion with the BP acquisition of BHP’s assets accounting for $5.2 billion.
The Bakken had a solid second-quarter with $6.7 billion on seven transactions as some companies look to leave the Permian for easier pickings. Cimarex sold noncore assets for $10,000 dollars per acre, which is an unusually low price for the Permian.
Infrastructure deals have been red hot with what PWC called a record high second quarter for midstream transactions at $33.1 billion. The Permian bottleneck is helping drive midstream deals, including Brazos Midstream $1.75 billion Delaware Basin sale.
E&Ps want in on the midstream action. Apache and Kayne Anderson partnered to form Altus Midstream. Diamondback's Rattler Midstream filed its IPO. Black Diamond was formed from a partnership between EnCap Flatrock Midstream and Noble Energy's Noble Midstream Partners.
Finally, several midstream deals, including the Brazos sale, involved private equity rollovers in which a larger private equity firm buys out a smaller company's midstream assets. Private equity has cash reserves that also makes them formidable in a bidding war.
Recommended Reading
Uinta Basin: 50% More Oil for Twice the Proppant
2024-03-06 - The higher-intensity completions are costing an average of 35% fewer dollars spent per barrel of oil equivalent of output, Crescent Energy told investors and analysts on March 5.
Canadian Natural Resources Boosting Production in Oil Sands
2024-03-04 - Canadian Natural Resources will increase its quarterly dividend following record production volumes in the quarter.
Green Swan Seeks US Financing for Global Decarbonization Projects
2024-02-21 - Green Swan, an investment platform seeking to provide capital to countries signed on to the Paris Agreement, is courting U.S. investors to fund decarbonization projects in countries including Iran and Venezuela, its executives told Hart Energy.
Chesapeake Slashing Drilling Activity, Output Amid Low NatGas Prices
2024-02-20 - With natural gas markets still oversupplied and commodity prices low, gas producer Chesapeake Energy plans to start cutting rigs and frac crews in March.
Tellurian, Institution Investor Agree to New Loan Repayment Terms
2024-02-22 - Tellurian reached an agreement with an unnamed institutional investor to pledge its interest in the Driftwood project as collateral.