A Look at Key Trends in M&A Activity in the Permian
Permian deal volumes by size
As we have been discussing, 2017 has seen a lot of enthusiasm for merger and acquisition (or M&A) activity in the oil and gas sector. The majority of these deals have taken place in the Permian.
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The chart above shows upstream and midstream companies involved in key Permian deals this year. Most of the mergers and acquisitions in 2017 have fallen in the $500 million to $1 billion range, as we can see in the graph above. Upstream companies Occidental Petroleum (OXY), Carrizo Oil & Gas (CRZO), and Marathon Oil (MRO) purchased Permian acreage for $600 million, $648 million, and $700 million, respectively. Earlier in January, WPX Energy (WPX) paid $775 million in exchange for ~18,000 net acres in the Delaware Basin from Panther Energy Company and Carrier Energy Partners.
After exiting bankruptcy in September 2016, Halcon Resources announced entry in the Delaware Basin in January 2017. The company recently closed another acquisition in the Delaware Basin, which is located in the Permian, for $88 million, bringing the value of its total Permian acquisitions this year to $793 million.
Midstream activity in 2017
Midstream companies also joined the fray to gain Permian exposure. In March this year, Targa Resources (TRGP) paid $565 million in exchange for Outrigger Permian’s Midland and Delaware basin gathering and processing assets.