Page 13 - NorthAmOil Annual Review 2021

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Some of the major
recent deals are taking
place in regions other
than the Permian
Basin.

in. (See NorthAmOil Week 18) driller, and Rice said such private players are
EQT is another company on a shopping unlikely to be replaced by new ones given the
spree, having bought Chevron’s assets in the scarcity of funding available to new exploration.
Appalachian Basin for $735mn in late 2020. The “The pipe of private equity-backed companies
company is undergoing a major overhaul of its has almost been shut off,” Rice told Bloomberg.
operations in an effort to improve its perfor- “You don’t have private equity companies feed-
mance and has put the brakes on activity while ing more private equity-backed energy compa-
this is underway. However, its acquisitions illus- nies into the mix,” he said.
trate that the company does not deem it neces- “These private operators are being consol-
sary to hold back on acquiring new acreage at idated by the publics that will put their assets
the same time. to a maintenance mode,” Rice continued, add- EQT’s acquisition
ing that EQT would only do enough drilling
What next? in Alta’s acreage to keep production levels flat of Alta is a recent
Both oil- and gas-focused transactions are in the coming years. “The days of growth are example of a
anticipated to help the shale industry maintain behind us,” Rice said. “We are in a different era
the recent commitment to restraint by concen- of shale development.” public company
trating assets in the hands of fewer players that This is not limited to gas alone. A similar mes-
understand the importance of not contributing sage came from Pioneer’s CEO, Scott Sheffield, buying a private
to a new glut. Indeed, many of the leading shale in reference to oil producers in shale plays. On
producers have already stated a commitment to Pioneer’s earnings call earlier this month, Shef- driller.
keeping the brakes on regardless of what com- field said he hoped for more consolidation to
modity prices do in the short term. curb volume increases from smaller, private
Speaking about shale gas in particular, EQT’s producers. He added, though, that an uptick in
CEO, Toby Rice, said earlier this month that he drilling by private firms had not yet reached the
expected consolidation to help put an end to gas point when it could undo the impact of OPEC+
supply gluts. He noted in particular that assets oil supply curbs.
are being transferred from private companies If Rice’s comments about private players in
to publicly traded ones, which are under more the gas space can also apply to oil – and they
pressure to demonstrate fiscal discipline thanks likely do – then even more consolidation, result-
to their shareholders. ing in a shale industry with fewer private firms
Indeed, EQT’s acquisition of Alta is a recent and more large, publicly traded companies, can
example of a public company buying a private be expected.™

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