Permian Basin Marks Record-Breaking $100 bn in U.S. Oil and Gas M&A Deals: Wood Mackenzie

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The Permian basin has emerged as the hotbed for mergers and acquisitions in the U.S. oil and gas sector, hitting an unprecedented milestone of over $100 billion in deals this year.

A culmination of major acquisitions by industry giants like Exxon Mobil, Chevron, and Occidental has driven this surge, solidifying the region’s significance for energy production.

The U.S. oil and gas industry’s focus has intensified on the Permian basin, witnessing a staggering $100 billion in mergers and acquisitions during the year 2023. This historic figure follows a series of colossal deals, underscoring the basin’s pivotal role in the nation’s energy landscape, consultancy firm Wood Mackenzie said.

Among the headline-grabbing transactions, Exxon Mobil’s proposed $60 billion deal with Pioneer Natural Resources and Chevron’s $53 billion agreement with Hess stand out prominently. Additionally, significant acquisitions such as Permian Resources’ $4.5 billion bid for Earthstone Energy and Ovintiv’s $4.3 billion investment in three Permian Basin assets have contributed to this monumental figure.

Civitas Resources further bolstered this trend by expending a combined $4.7 billion on two privately held properties within the Permian region – Tap Rock Resources and Hibernia Energy III assets.

Renowned for its prolific shale oil output and substantial untapped reserves complemented by robust infrastructure, the Permian basin continues to allure producers seeking to expand their resource portfolio. This allure has resulted in Occidental’s recent acquisition of CrownRock, positioning itself as the sixth-largest producer in the lower 48 U.S. states, generating an estimated 1 million barrels of oil equivalent per day. Notably, this places Occidental among esteemed company alongside Chevron, EOG, ExxonMobil, EQT, and ConocoPhillips.

In the wake of this acquisition, Occidental is set to become a leading producer in the Permian basin, ranking within the top three, surpassing the production levels of Pioneer at the time of its sale announcement.

Commenting on this surge in acquisitions, Robert Clarke, Vice President of Upstream Research at Wood Mackenzie, expressed, “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.”

Wood Mackenzie noted that this year’s mergers and acquisitions spending in the top U.S. shale field surpasses even the impressive $65 billion mark set in 2019, largely driven by Occidental Petroleum Corp’s monumental $38 billion acquisition of Permian rival Anadarko, Reuters news report said.

This record-breaking surge in mergers and acquisitions underscores the Permian basin’s indispensable role in shaping the trajectory of the U.S. oil and gas sector, solidifying its position as a cornerstone for major players and independent entities

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