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The U.S. shale patch recorded $12 billion worth of mergers in the quarter ended Sept. 30, the lowest total in six quarters, Enverus Intelligence Research has revealed.
Andrew Dittmar, principal analyst at Enervus, has noted that some of the biggest buyers have become sellers, citing Occidental Petroleum‘s (NYSE:OXY) $818 million sale of properties to Permian Resources (NYSE:PR) and APA Corp.(NASDAQ:APA) divesting older properties to an undisclosed buyer. According to Dittmar, “Upstream M&A was bound to drop” after 2023’s record $192 billion in deals largely in the Permian basin of West Texas.
One of the biggest deals during the quarter was by independent oil & gas company Devon Energy (NYSE:DVN) which announced plans to acquire Grayson Mill Energy‘s Williston Basin business in a cash and stock deal valued at ~$5B, consisting of $3.25B of cash and $1.75B of stock.
According to the Oklahoma-based shale producer, the purchase will add 307K net acres (70% working interest) to its portfolio, significantly expanding its position in the Williston Basin. Production from the acquired properties is expected to be maintained at ~100K boe/day (55% oil) in 2025. With enhanced scale in the basin, Devon expects to realize up to $50M in average annual cash flow savings from marketing synergies and operating efficiencies.
Devon currently produces 375K bbl of crude per day with total production clocking in at an average 765K boe/day across its portfolio of assets. Devon has also announced plans to boost its stock buyback authorization by 67% to $5B thanks to the accretive nature of the transaction to free cash flow.
Meanwhile, outside the shale patch, Louis, Missouri-based coal miner Arch Resources Inc. (NYSE:ARCH) and Canonsburg, Pennsylvania-based Consol Energy Inc.(NYSE:CEIX) announced they would combine in an all-stock “merger of equals” to create Core Natural Resources in a deal valued at $5.2B. Under the deal terms, Arch Resources shareholders will receive a fixed exchange ratio of 1.326 shares of Consol common stock for each share of Arch common stock owned.
By Alex Kimani for Oilprice.com
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The post U.S. Shale Patch M&A Declines In Q3 To $12B appeared first on Energy News Beat.
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