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Dan Dicker

Dan Dicker

Dan Dicker is a 25 year veteran of the New York Mercantile Exchange where he traded crude oil, natural gas, unleaded gasoline and heating oil…

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Follow The Big Money In The Shale Patch

Permian

This last week, we’d have to say that many of the mini-majors, as well as one mega-major, just ran out of patience with this oil market. Just as the Saudis threw in the towel on glutting a market and waiting for US independents to crack, opting for a production agreement, so did some key oil companies here in the US give up on waiting for a greater value, convinced that the oil markets are headed steadily higher from here.

And one theme recurs through it all: Permian basin shale oil.

First, Exxon-Mobil’s (XOM) major move of buying up the privately owned Bass family acreage for $6.6 billion. This will be the last deal for CEO Rex Tillerson as he moves on to Washington, and he’ll certainly hope this one creates a better legacy than his deal for XTO energy in 2010. It’s as focused as the XTO was, in the hottest US shale play of the Permian, with an estimated 60 billion barrels of oil in reserves from 275,000 acres.

Noble Energy (NBL) acquired the Permian assets from Clayton Williams (CWEI), which has been by far the hottest oil stock of the last year. After trading in single digits in the spring of 2016, CWEI has steadily risen to above $100 a share – only to add another almost 50% premium with the Noble deal.

Finally, we saw the sale of Anadarko’s (APC) Eagle Ford acreage for $2.3b to Sanchez Energy (SN). This deal is particularly interesting when we look at the additional sale of Marcellus natural gas acreage that…




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