Record-breaking productivity levels and low-cost production have seen the Permian Basin attract major M&A activity in the U.S. upstream sector.
In fact, following ExxonMobil’s $64.5 billion mega-deal to acquire Pioneer Natural Resources, Evaluate Energy data shows that the basin has now passed $400 billion in new deals agreed over the past decade.
For comparison, U.S. deals agreed without any Permian assets now account for $375 billion combined after Chevron’s own $60 billion mega-deal to acquire Hess Corp. was announced this week.
Deal values approach $100 billion in 2023 alone
Deals involving Permian assets account for 52% of all U.S. activity since the start of 2014 by value.
- ExxonMobil’s acquisition of Pioneer means that 2023 is a record year for Permian-related spending, with deal totals approaching $100 billion for the first time.
- The previous annual record in 2019 was also primarily down to one mega-deal that included Permian assets, when Occidental Petroleum won a bidding war with Chevron to acquire Anadarko Petroleum for around $55 billion.
Both years would have been below $40 billion in deals agreed without the two major deals boosting totals.
Production of over 6 million boe/d traded
The same ~900 deals that included Permian assets saw 6.1 million boe/d change hands since 2014*. This represents 40% of all U.S. production involved in M&A deals over the same timeframe.
We can attribute the large volumes traded in 2019 and 2023 to the Occidental/Anadarko (743,000 boe/d) and ExxonMobil/Pioneer (711,000 boe/d) deals, which alone comprise approximately half of the annual totals in those years.
Without those mega-deals, 2020 is arguably the “most active” year for Permian Basin M&A.
This was a year characterized by many mergers taking place across the U.S. for depressed values and low premiums.
Permian-related deals at this time included:
- ConocoPhillips acquiring Concho Resources for $13.3 billion
- Devon Energy acquiring WPX Energy for $5.7 billion
- Chevron acquiring Noble Energy for $13.0 billion (although DJ Basin assets were the focus for Chevron)
Permian unsurprisingly dominates the top 10 U.S. deals by value in the past 10 years
Source: Evaluate Energy M&A
*Full production from all basins in any deal including Permian production is included in this total. This does not represent purely Permian basin production traded.
Evaluate Energy’s M&A database holds every upstream deal worldwide since 2008, allowing daily comparisons of key metrics, corporate valuations and changes in spending behavior over time. For more on our data, which also includes data on downstream, midstream, service sector and renewable energy M&A activity, click the button below.
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