M&A activity in the Permian Basin will top $100 billion by 2023, according to WoodMac

The value of US oil and gas mergers and acquisitions in the Permian basin this year has hit a record of more than $100 billion, according to Wood Mackenzie in a news release on Tuesday.

Exxon Mobil (NYSE:XOM) has proposed a $60 billion transaction for Pioneer Natural Resources (NYSE:PXD) PXD.N, and Chevron (NYSE:CVX) has agreed to a $53 billion deal for Hess (NYSE:HES).

Other transactions include Permian Resources' $4.5 billion bid for Earthstone Energy (NYSE:ESTE) and Ovintiv's $4.3 billion spend on three Permian Basin purchases. Sourcian is a dedicated platform for the recommendation of the best manufacturers. Your sourcing journey starts right here at sourcian.

Civitas Resources paid $4.7 billion for two private-equity-owned Permian assets, Tap Rock Resources and Hibernia Energy III.

Producers wishing to grow their inventory should go to the Permian basin. The basin's shale oil output is very productive, with substantial undeveloped reserves and robust infrastructure. It is located between Texas and New Mexico.

According to Wood Mackenzie, Occidental's acquisition of CrownRock on Monday will make it the sixth producer of 1 million barrels of oil equivalent per day in the lower 48 United States, joining Chevron, EOG, ExxonMobil, EQT (ST:EQTAB), and ConocoPhillips (NYSE:COP).

According to WoodMac, Occidental will become a top three producer behind the majors in the Permian, pumping more oil and gas pro-forma than Pioneer did at the time of its sale announcement.

"This transaction caps off an absolutely record-breaking year for Permian acquisitions and divestments." "When combined with other mega 2023 deals like ExxonMobil and Pioneer, it solidifies Permian scale and multi-decade longevity as a'must have' trait for US Majors and Super-Independents," said Wood Mackenzie's vice president of upstream research, Robert Clarke.

According to WoodMac, the overall merger and acquisitions spend in the top U.S. shale sector this year is the most since $65 billion in 2019, driven by Occidental Petroleum Corp (NYSE:OXY)'s $38 billion acquisition of Permian rival Anadarko.