• 4 minutes Why Trump Is Right to Re-Open the Economy
  • 7 minutes Did Trump start the oil price war?
  • 11 minutes Covid-19 logarithmic growth
  • 15 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 18 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 6 hours How to Create a Pandemic
  • 1 hour KSA taking Missiles from ?
  • 4 hours There are 4 major mfg of hydroxychloroquine in the world. China, Germany, India and Israel. Germany and India are hoarding production and blocked exports to the United States. China not shipping any , don't know their policy.
  • 2 hours A New Solar-Panel Plant Could Have Capacity to Meet Half of Global Demand
  • 16 mins Which producers will shut in first?
  • 50 mins TRUMP pushing Hydroxychloroquine + Zpak therapy forward despite FDA conservative approach. As he reasons, "What have we got to lose ?"
  • 13 hours Trump eyes massive expulsion of suspected Chinese spies
  • 3 hours Breaking News - Strategic Strikes on Chinese Troll Farms
  • 44 mins Eight Billion Dollars Wasted on Nuclear Storage Plant
  • 12 hours Today 127 new cases in US, 99 in China, 778 in Italy
  • 15 hours Western Canadian Select selling for $6.48 bbl. Enbridge charges between $7 to $9 bbl to ship to the GOM refineries.
  • 14 hours America’s Corona Tsar, Andrew Fauci, Concedes Covid-19 May Be Just a Bad Flu With a Fatality Rate of 0.1%

Billion-Dollar Acquisitions Are Taking The Permian By Storm

Permian

Whiting Petroleum is talking acquisition with Abraxas Petroleum Corp., a Texas-based company with operations in the Permian, unnamed sources told Reuters.

According to one of the sources, the mostly likely scenario was for an all-stock acquisition. According to another, the tie-up would boost Whiting’s acreage in the Permian and also help it spread its overhead costs over greater oil production, Reuters noted.

Neither of the companies confirmed or denied the report, and the Reuters sources said that reaching a deal is far from guaranteed.

Consolidation among U.S. oil independents has been a topic of discussion for analysts for a while now, with many of the opinion that both independents and Big Oil would be willing to exit other shale plays in the U.S. to focus on the already crowded Permian where production is rising the fastest.

Earlier this year, Bloomberg reported that a wave of M&A was coming to the Permian as the larger players sought to expand their presence there. Indeed, Big Oil majors have been selling their operations in Europe to focus on the Permian at home. Yet if the Reuters report is confirmed, it would highlight that it’s not just Big Oil that is doubling down on the Permian. Independents are growing bigger, too.

Related: Iraq's Return To Oil's Top Table

Yesterday, Parsley Energy announced that it would buy rival Jagged Peak Energy for $1.62 billion in an all-stock deal. The acquisition would boost Parsley’s Permian acreage.

Shareholders don’t seem like they are too happy about this consolidation drive. Reuters reported on Monday that Parsley shares fell by as much as 11 percent following the deal announcement. On the other hand, consolidations usually cut costs, which should sit well with investors that have yet to see the higher returns they have been insisting on.

Besides the Permian, Abraxas Petroleum also has assets in the Rocky Mountains and in the Powder River Basin in Wyoming.

By Irina Slav for Oilprice.com

More Top Reads From Oillprice.com:



Join the discussion | Back to homepage




Leave a comment

Leave a comment

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