Bigger: E&P Consolidation Continues Unabated, With Most M&A Focused on the Permian

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The past 45 months — from the start of 2020 to the start of Q4 2023 — has been a period of almost unprecedented consolidation within the oil and gas industry. Not since the turn of the 21st century has U.S. merger-and-acquisition activity been so frenetic. Back then, almost a quarter-century ago, a plunge in crude oil prices spurred mega-deals that helped to form many of today’s supermajors and large E&P independents. To name just a few, Exxon joined with Mobil, BP with Amoco and ARCO, Chevron with Texaco, Anadarko with Union Pacific and Kerr McGee, ConocoPhillips with Burlington Resources, and Devon with Mitchell Energy and Ocean Energy.

This Drill Down Report provides a summary of the vast majority of the large M&A deals that have been announced and/or closed in the U.S. in the past 12 months, starting with the most recent agreements and deal closings. Of course, each of the acquisitions is unique, but when they are discussed as a group, they confirm many of the generalizations we note in this report. Most important, perhaps, the acquiring producers were looking for scale, the opportunity for improved productivity, and the expanded inventory that they expect they will need in the years ahead.

Key takeaways from the report include:

  • The frenzy of upstream M&A activity that started in mid-2020 is still underway.
  • Consolidation is occurring not only in the Permian, but in other shale plays too.
  • Producers want to gain scale, become more efficient, build inventories of proved reserves.
  • Many E&Ps backed by private equity see an opportunity to monetize their investments.
  • With all the recent M&A, there are now far fewer potential targets for acquisition.

Bigger” is included in RBN Energy’s 2023 Drill Down report series, a suite of reports covering many of the key issues expected to impact the markets for crude oil, natural gas and natural gas liquids. Drill Down reports are part of RBN Backstage Pass™ premium resources that also include Blog Archive Access, Spotcheck Indicators, Market Fundamentals Webcasts, Get-Togethers and more. By subscribing to RBN’s Backstage Pass™ Premium Services, you plug into our network and get direct access to our premium resources.

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