Lime Rock CEO: Small, Mid Cap E&Ps Stuck in M&A ‘No Man’s Land’
Eric Mullins said that as large-scale M&A players begin to rationalize their purchases, as much as $18 billion in non-core divestments could find homes to asset-hungry acquirers.
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Darren Barbee, senior editor at Hart Energy, is the point person for A&D transactions and a writer for Oil and Gas Investor magazine and website. Barbee has won several national and state awards for reporting in his 17 years as a journalist, including his work as a reporter for the Fort Worth Star-Telegram before joining Hart. He holds a master's degree in Information Systems from the University of Texas Arlington.
Eric Mullins said that as large-scale M&A players begin to rationalize their purchases, as much as $18 billion in non-core divestments could find homes to asset-hungry acquirers.
Since September, Post Oak Energy Capital has backed new portfolio companies in the Permian Basin and Haynesville Shale and made an equity commitment to Utica Shale E&P Tiburon Oil & Gas Partners.
Nabors Industries Ltd. will buy Parker Wellbore for 4.8 million shares of Nabors common stock and assume an additional $100 million in debt as OFS companies continue to consolidate following a massive wave of E&P M&A since 2023.
WhiteHawk Energy, in pursuit of a merger with PHX Minerals for at least 18 months, has proposed an offer representing a 17% premium to the mineral company’s 30-day average weighted price.
As private equity begins the process of recycling inventory, likely to be divested from large-scale mergers, executives acknowledged that raising funds has become increasingly difficult.
Frost Cochran, managing partner at Post Oak Energy Capital, said the private equity firm will continue to focus on the Permian Basin while making opportunistic deals as it recently did in the Haynesville Shale.
Chevron said the divestitures are part of its plans to sell $10 billion to $15 billion worth of assets by 2028 following the company’s acquisition of Hess Corp. for $53 billion.
Bryan Sheffield, managing partner of Formentera Partners and founder of Parsley Energy, discussed E&P capital, M&A barriers and how longer laterals could spur a “growth mode” at Hart Energy’s Energy Capital Conference.
Amber Energy, led by industry veterans Gregory Goff and Jeff Stevens, was selected by a court-appointed special master to buy Citgo Petroleum, which is held by a Venezuelan company, for $7.286 billion.
Analysts caution that reports of Saudi Arabia abandoning a philosophy of supporting prices in favor of defending market share could be a move to get OPEC+ members in line rather than to launch a costly oil war with the U.S., among others.
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