The value of U.S. oil and gas mergers and acquisitions in the Permian basin this year has reached a record of more than $100 billion after several multi-billion dollar deals, consultancy Wood Mackenzie said in a news release on Tuesday.
Those include the blockbuster deals such as Exxon Mobil’s $60-billion proposed deal for Pioneer Natural Resources PXD.N and Chevron’s $53-billion agreement for Hess.
Other deals include Permian Resources’ $4.5 billion bid for Earthstone Energy and Ovintiv’s $4.3 billion splurge on three Permian Basin acquisitions.
Civitas Resources spent a combined $4.7 billion for two private-equity owned properties in the Permian, Tap Rock Resources and Hibernia Energy III assets.
The Permian basin is a prime target for producers looking to increase their inventory. Lying between Texas and New Mexico, the basin’s shale oil output is highly productive with large undeveloped reserves and robust infrastructure.
Occidental’s purchase of CrownRock announced on Monday will create the sixth producer in the lower 48 U.S. states of 1 million barrels of oil equivalent per day, with others including Chevron, EOG, ExxonMobil, EQT and ConocoPhillips, Wood Mackenzie said.
In the Permian specifically, Occidental will become a top three producer behind the majors, pumping more oil and gas pro-forma than Pioneer did at the time of its sale announcement, WoodMac 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,” Robert Clarke, vice president of upstream research at Wood Mackenzie said.
WoodMac said the total merger and acquisitions spend this year in the top U.S. shale field is the highest since $65 billion in 2019, led by Occidental Petroleum Corp’s $38 billion acquisition of Permian rival Anadarko.
(Reporting by Rahul Paswan and Brijesh Patel in Bengaluru; Editing by Christian Schmollinger)