MGY - Permian Resources Chord Energy Magnolia Oil may be next M&A targets - analyst
2023-10-29 09:03:39 ET
Permian Resources ( NYSE: PR ), Chord Energy ( NASDAQ: CHRD ), and Magnolia Oil & Gas ( NYSE: MGY ) could be the next acquisition targets in the oil industry as consolidation continues with Exxon Mobil's ( XOM ) and Chevron's ( CVX ) recent mega transactions.
"All three of these could be very very interesting targets because they all have very good inventory," Truist analyst Neal Dingmann said in an interview on CNBC on Friday.
Dingmann also sees several private companies, especially in the Midland Basin, as likely acquisition targets.
The analyst's comments come after a Reuters report on Thursday that ConocoPhillips ( COP ) is considering an offer for privately held Permian Basin oil producer CrownRock, a week after reports said Devon Energy ( DVN ) is looking at CrownRock as a potential acquisition target .
CrownRock, which is said to be valued at $10 billion–$15 billion, owns ~86K net acres in the northern part of the Midland Basin in Texas, which is part of the Permian Basin. CrownRock's investment bankers have asked interested parties to submit initial offers next week, according to the Reuters report.
Dingmann, in a note earlier this week, also said he sees Civitas Resources (CIVI ) as a likely potential target with companies including ConocoPhillips ( COP ), Coterra Energy ( CTRA ) and Devon Energy ( DVN ) standing to benefit the most from greater scale.
Dingmann sees EOG Resources ( EOG ) and Occidental Petroleum ( OXY ) as potential buyers in the space.
"You have a host of large independents that potentially would like to get bigger and add more inventory," Dingmann added.
As for Exxon's ( XOM ) recently announced $60 billion purchase of Pioneer Natural Resources ( PXD ) and Chevron's deal to acquire Hess Corp. ( HES ) for about $53 billion on Monday, Dingmann belives that Exxon got the better deal.
“We like Exxon’s much better," Dingmann explained. "I think both are going to be a bit diliutive, let’s call for even potentially the next 12 months. But I think Exxon bought the premier assets that are out there in the U.S. They bought it for a very reasonable price and I think you are going to see a big big upside on that beginning somewhere around, I’ll be cautious, and say 2025.”
Dingmann described Chevron's ( CVX ) planned purchase of Hess ( HES ) as "odd."
"Chevron is basically buying an asset and saying, alright Exxon you are going to be running of our biggest assets going forward for us," Digmann said. "So it’s kind of an odd acquisition in my opinion.”
More on Permian Resources
- Permian Resources: Earthstone Energy Acquisition Should Close Soon
- Permian Resources: The Best Permian Pure Play On The Market
- Permian Resources: Oil & Gas Has Gotta Be Cheap When This Happens
- Earthstone Energy says HSR waiting period in sale to Permian Resources expired
- Permian Resources prices secondary offering of 21.45M shares
For further details see:
Permian Resources, Chord Energy, Magnolia Oil may be next M&A targets - analyst