Oasis

So far, most of the merger-and-acquisition activity among crude-oil-focused producers in the COVID era has occurred where you would expect it: the Permian, which seems to dominate almost every discussion about the U.S. energy industry. More recently, though, there has been an uptick in E&P consolidation in the Denver-Julesburg Basin in the Rockies and, earlier this month, in the Bakken. There, Whiting Petroleum and Oasis Petroleum — two once-struggling producers — have agreed to a merger of equals that will create the Bakken’s second-largest producer and the largest pure-play E&P. In today’s RBN blog, we discuss the companies’ stock-and-cash deal, which will result in a yet-to-be-renamed entity with an enterprise value of about $6 billion.

The U.S. oil and gas industry’s upstream sector has seen more than its share of mergers and acquisitions in the year and a half since COVID-19 put energy markets on a wild roller coaster. ConocoPhillips buying Concho Resources and then Shell’s Permian assets. Chevron snapping up Noble Energy. Pioneer Natural Resources acquiring Parsley Energy. And yesterday’s big news: Continental Resources’ planned purchase of Pioneer’s assets in the Permian’s Delaware Basin. It’s not just hydrocarbon producers that are consolidating and expanding, however. There’s also been a flurry of large-scale M&A activity in the midstream sector, mostly involving oil and gas gatherers in the Permian and the Bakken — the nation’s two largest crude oil-focused basins. What’s driving these combinations? In today’s RBN blog, we begin a review of recent, major pipeline-company combinations and the benefits participants expect to realize from them.

The basis blowout at the Waha Hub in the Permian Basin arrived in full force over the last few weeks, with natural gas prices reaching discounts to the Henry Hub not witnessed since 2009. Available takeaway capacity has been quickly eroding on the existing pipeline corridors out of the basin, leaving many in the market pondering where all the incremental gas production will go before a new greenfield expansion pipe relieves the market in late 2019. Last week, a partial answer came in the form of a pipeline expansion project by Enterprise Products Partners and Energy Transfer Partners slated for completion later this year. While the project’s estimated size is far too small to preclude additional greenfield pipelines beyond 2019, it does highlight the attractive economics of brownfield expansions on the Texas intrastate pipelines at Waha. Today, we analyze announced and possible intrastate pipeline projects around Waha.