Permian M&A Action Continues

Politics, Geopolitics & Conflict

-Protests in Libya that have led to the shutdown of the Sharara oilfield, the country’s largest, are also putting upward pressure on oil prices. Protesters are demanding better public service and development in southern Libya. The Sharara field has a 300,000 barrel-per-day capacity and has been the target of protests in the past, most recently in July this year. Libya is currently producing around 1.2 million bpd and is targeting a ramp-up to 2 million bpd by 2030. Oil prices reacted to this shut-in (and rising Middle East tensions) earlier in the week by rising, gaining as much as 3% at one point on Wednesday. However, on Thursday, fears of a loss of Libyan supply were counterbalanced by fears of slackening demand.

-Lebanon has launched its third oil and gas exploration licensing round, with bids for the nine blocks offered due by 2 July 2024, despite the ongoing threat of conflict with Israel. Blocks 1-10 will be auctioned off, with the exception of Block 9, which went to a consortium of TotalEnergies, Eni and Novatek in 2017.

Discovery & Development

-Two of Talos Energy’s nat gas deepwater discoveries in the GoM–tied back to its Ram Powell tension-leg platform–came online in December, the company said this week. The two discoveries, Lime Rock and Venice, achieved a rate of 18,500 boepd, 45% of which is oil, in late December. The combined gross ultimate recoverable resources of the discoveries are between 20 and 30 million boe.

-Galp Energia reported signs of hydrocarbons from its Mopane-1X probe in Namibia’s Orange basin in PEL 93. The company said it is too early to call it a discovery.

-Dubai’s Dragon Oil has kicked off production of oil from the Al Wasl offshore oilfield in Egypt–its first in the country. Production began at a rate of 3,000 bpd.

Deals, Mergers & Acquisitions

-APA Corp.--the parent company of Apache Corporation–will buy Callon Petroleum in a deal worth $4.5B in an all stock deal. This will give APA prime acreage in the Permian. APA will retire Callon’s $1.9B of debt.

-Civitas Resources closed its deal this week with Vitol’s Vencer Energy for the acquisition of 44,000 acres in the Permian’s Midland Basin. Estimated production is 62,000 boepd. This will bump up Civitas’ production in the area to 170,000 boepd, 50% of which is oil. Included in the sale were 400 development locations.

-Iberdrola SA’s US unit Avangrid has canceled the $4.3B agreement to purchase New Mexico’s utility PNM Resources Inc due to final regulatory approvals not being received by year end. New Mexico regulators had blocked the deal in 2021, and while PNM had agreed to an extension beyond Dec 31, 2023, Avangrid backed out when the deadline expired.

-Pattern Energy Group closed an $11B financing deal and has commenced construction on the SunZia Transmission and SunZia Wind projects–which it hails as the largest clean energy infrastructure project in the U.S with the ability to transport 3,000MW of wind-generated electricity across Western states.

-Australia’s Karoon Energy closed a $720 million acquisition of a 30% stake in the Who Dat and Dome Patrol oil and gas fields and a 10% stake in the Abilene field offshore Louisiana from LLOG Exploration Offshore and LLOG Omega Holdings.