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Four-plus years after the start of the oil and gas industry’s biggest consolidation in a quarter century, new M&A announcements keep coming. The primary drivers of these deals — many of which are valued in billions of dollars — are clear. Among other things, E&Ps seek scale and the economies of scale that come with it. They also have come to believe that it makes more sense to grow production through M&A than through aggressive capital spending. And, for some producers, buying another E&P lock, stock and barrel is the best way to either expand in the all-important Permian or diversify into other plays like the Bakken, the Eagle Ford, the Denver-Julesburg (DJ) and the Uinta. (Offshore Guyana too, for Chevron.)
This report doesn’t list or discuss every upstream acquisition — there simply have been too many — nor does it discuss any of the post-acquisition divestitures and acreage swaps that a number of companies have undertaken since closing on their deals. Instead, the report focuses on 10-billion-dollar upstream M&A deals that were announced in 2024, plus the Chevron/Hess deal, which was announced in late 2023 but is not expected to close until sometime next year. (Many of the 2024 deals have already closed, but a few others won't do so until Q1 2025).
This representative sample indicates that while an expanded presence in the Permian remains a primary focus of some E&Ps, many others — like ConocoPhillips, which we discussed just above — are looking beyond the Permian at other domestic shale plays, including the Bakken, the Eagle Ford, the DJ and the Uinta.
Key takeaways from the report include:
- Larger producers sought to gain additional scale and position themselves for an increasingly competitive era.
- Oil-focused E&Ps led the consolidation charge, but Chesapeake/Southwestern combo created the largest U.S. gas producer.
- The Permian’s Midland and Delaware basins were targeted, but so were the Bakken, Eagle Ford and Uinta — and Guyana.
- The deal-making isn’t over, but the M&A pace in 2024 suggests it’s likely to slow in 2025.
“U Can’t Touch This” is included in RBN Energy’s 2024 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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