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
Tech Trends: Safety, Speed, Savings: Automation is Transforming Drilling
2024-03-26 - Drilling is getting smarter through automation, delivering efficiency, consistency and reliability.
AI Advancing Underwater, Reducing Human Risk
2024-03-25 - Experts at CERAWeek by S&P Global detail the changes AI has made in the subsea robotics space while reducing the amount of human effort and safety hazards offshore.
CERAWeek: Large Language Models Fuel Industry-wide Productivity
2024-03-21 - AI experts promote the generative advantage of using AI to handle busywork while people focus on innovations.
Geothermal ‘Could Save the World,’ but Faces Familiar Subsurface Risks
2024-03-20 - CERAWeek panelists discussed hurdles to widespread use of Earth’s heat to generate power — problems familiar to oil and gas operators.
CERAWeek: AI, Energy Industry Meet at Scary but Exciting Crossroads
2024-03-19 - From optimizing assets to enabling interoperability, digital technology works best through collaboration.