The Permian Basin in the U.S. has witnessed a surge in oil and gas mergers and acquisitions this year, surpassing $100 billion in value. According to leading consultancy Wood Mackenzie, several multi-billion dollar deals have contributed to this milestone. Notably, Exxon Mobil is proposing a $60 billion deal to acquire Pioneer Natural Resources, while Chevron has agreed to a $53 billion agreement with Hess.
A Flourishing Market
These blockbuster deals are only part of the broader picture, as there have been several other significant transactions. Permian Resources, for instance, submitted a bid of $4.5 billion for Earthstone Energy, while Ovintiv splurged approximately $4.3 billion on three acquisitions in the Permian Basin. Civitas Resources also made a substantial investment of $4.7 billion in Tap Rock Resources and Hibernia Energy III assets, which were previously owned by private-equity firms.
Why the Permian Basin?
The Permian basin has become an attractive prospect for producers aiming to expand their resource base. Positioned between Texas and New Mexico, this shale oil-rich region boasts high productivity, sizeable untapped reserves, and a well-established infrastructure.
Shaping the Industry
Occidental’s recent acquisition of CrownRock further exemplifies the Permian Basin’s significance. This transaction will establish the sixth largest producer in the lower 48 states, with a daily oil equivalent output of 1 million barrels. Chevron, EOG, ExxonMobil, EQT, and ConocoPhillips are among the other major players in the Permian Basin, solidifying the region’s influential role in the oil and gas industry. Wood Mackenzie predicts that Occidental will become one of the top three producers in the Permian, surpassing Pioneer’s production levels at the time of its sale announcement.