• 3 minutes Biden Seeks $2 Trillion Clean Energy And Infrastructure Spending Boost
  • 5 minutes While U.S. Pipelines Are Under Siege, China Streamlines Its Oil and Gas Network
  • 8 minutes Gazprom fails to exempt Nord Stream-2 from EU market rules
  • 5 mins China wields coronavirus to nationalize American-owned carmaker
  • 4 hours Trumpist lies about coronavirus too bad for Facebook - BANNED!
  • 7 hours The Truth about Chinese and Indian Engineering
  • 7 hours China's impending economic meltdown
  • 10 hours Why Oil could hit $100
  • 1 day The World is Facing a Solar Panel Waste Problem
  • 4 hours Renewables Overtake Coal, But Lag Far Behind Oil And Natural Gas
  • 17 hours Pompeo upsets China; oil & gas prices to fall
  • 12 hours Brent above $45. Holding breath for $50??
  • 7 hours Open letter from Politico about US-russian relations
  • 2 days Sell Natural Gas Benefits to Grow the Market!
  • 2 days Trump Suggests Delaying Election Amid Fraud Claims
  • 2 days Rational analysis of CV19 from Harvard Medical School
  • 3 days The Core Issue Of US Chaos..Finally disclosed
Leaked: China Quietly Helped Saudi Arabia Build A Secret Nuclear Site

Leaked: China Quietly Helped Saudi Arabia Build A Secret Nuclear Site

Saudi Arabia has constructed with Chinese…

Explaining Saudi Arabia’s Oil Price Drop

Explaining Saudi Arabia’s Oil Price Drop

Saudi Arabia surprised markets by…

Shale Productivity Is Reaching Its Limit

Shale Productivity Is Reaching Its Limit

Shale producers have been increasing…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

U.S. Oil And Gas Deals Double In 2016

Deals in the Permian helped the U.S. oil and gas mergers and acquisitions tally soar to $69 billion in 2016. The industry has been quick to adapt and secure primary drilling sites profitable at US$50 oil and buy existing production, Houston-based oil and gas research firm PLS Inc. has said in a report.

Last year, a total of 385 deals were made for a total value of $69 billion, compared with $32 billion in 285 deals in 2015, the research firm said, noting that the Permian region in Texas was the most active M&A site with $27 billion worth of deals last year, of which $9 billion were in the Midland sub-basin and $18 billion in the Delaware sub-basin.

“Certainly, the Delaware basin portion of the Texas Permian region ranks as 2016’s M&A play of the year as fresh equity capital poured into the area to buy Tier 1 acreage and production in areas like Reeves, Pecos and Loving counties, Texas to the tune of $18.0 billion,” PLS Managing Director Brian Lidsky said in the report.

Permian buyers secured 18,500 net drilling locations, implying a low cost to secure around 10.3 billion net barrels in future inventory at about $1.90 per barrel, which heralds good times for the future production growth from the region, PLS said.

“The breakeven economics of the vast majority of this acreage is well below $40 per barrel,” the research firm noted.

After the Permian, the next two most active M&A areas were the Marcellus with $6.7 billion worth of deals, recovering from a stalled 2015 activity, and the SCOOP/STACK play in Oklahoma, with $5.1 billion worth of M&As, and doubling each year since 2014. Down the list, Eagle Ford in Texas, the Niobara in Colorado, and the Bakken in North Dakota were lagging in M&A activity but are “now recovering with higher pricing ahead”, PLS said.

In terms of individual deals, the $4.4 billion which Range Resources spent to buy Memorial Resource Development in North Louisiana’s Cotton Valley gas play was the biggest single deal of the year. Related: Saudi Aramco IPO May Not Happen If Oil Prices Rise

Looking to 2017, PLS expects this year to be a strong year of continued M&A in the U.S. and anticipates the deal venues will expand “beyond the white-hot Permian to other prime oil resource plays including the Eagle Ford and Bakken”.

As regards gas deals, rising U.S. LNG exports would spur more deal activity closer to the Gulf Coast and revive activity in plays such as Haynesville, Barnett and the gas window of the Eagle Ford.

Two months ago, EIA data showed that the value of the average M&A deal in the fourth quarter was set to be the highest in years. In the third quarter, there were 93 M&A announcements across the U.S. oil patch totaling $16.6 billion, according to the EIA.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News