2024-02-22 13:59:36 ET
Summary
- Exxon's $60 billion acquisition of Pioneer Natural Resources, with its 15% market share of the Permian, is the deal of the decade.
- However, other deals are extremely significant, such as Diamondback and Endeavor, Chesapeake-Southwestern and Chevron-Hess.
- Consolidation in the industry is driven by new value propositions, resource efficiency and longer-term market outlooks.
- The activity in U.S. shale basins is looking different, whether you call it shale 2.0, 3.0 or 4.0.
Having written extensively on the Permian with early vintage work on Seeking Alpha, one can see the evolution of various firms. Of late, Pioneer (PXD) has dominated the Permian in terms of leadership and best practices. Now, Exxon (XOM) will fill the role, partly, through its $60 billion acquisition of Pioneer. In oil and gas, it’s likely the deal of the decade, because of its impact in many ways. With Pioneer, Exxon will have a 15% market share of the Permian, 5% of U.S. supply and 3% of global supply. The U.S. produces about 13 million b/d of the globe’s 102 million b/d supply. In my 2021 feature with ex-chief executive Scott Sheffield, he forecast that industry consolidation was going to happen. In 2013, in our early days of my shale chronicling, he specified how the composition of and the growth of the Permian would look....
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For further details see:
Merger Mania Overview: Parsing The Permian Deals And More