Page 13 - NorthAmOil Week 28 2022

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POLICY OIL test the waters for mergers and acquisitions.”
The Permian Basin garnered $5.5 billion
Pfluger leads letter to Permian drives 46% of in deal activity, mostly thanks to the merger
between Midland-based Colgate Energy
EPA against Permian non- deals Partners and Denver’s Centennial Resource
Development. Enverus expects the Permian to
attainment designation The country’s most productive oil field, the be the main driver of deals moving forward.
Permian Basin spanning across parts of West
While market volatility may spook some
Congressman August Pfluger (TX-11) led Texas and New Mexico, is driving nearly half investors, data firm PwC expects overall oil
a letter to the Environmental Protection of all oil and gas merger and acquisition deals, and gas mergers and acquisitions to speed
Agency decrying the agency’s potential non- according to an energy research firm. up during the second half of the year. In its
attainment redesignation that would curb During the second quarter of year outlook the international firm said private
oil and gas production in the Permian Basin, companies inked about $12 billion worth equity firms attracted to high oil and gas
the largest secure supply of oil and gas in the of merger and acquisition deals related to prices are driving the deals.
world. oil and gas production, data from Enverus HOUSTON CHRONICLE
Congressman Pfluger was joined by both Intelligence Research shows. That’s down
Texas Senators, John Cornyn and Ted Cruz, as about 18 percent from the $14.7 billion of Sales of Permian lands in
well as Representatives Yvette Herrell, Jodey deals done in the first few months of the year.
C. Arrington, Kevin Brady, Roger Williams, Mergers and acquisitions often follow the New Mexico announced as
Tony Gonzales, Ronny L. Jackson, Louie health of the economy: The number of deals
Gohmert, Jake Ellzey, Randy Weber, Chip declines during a downtown and rises in good demand grows
Roy, and Brian Babin, D.D.S. times. Even with worsening inflation and a
In the letter, the Members state: “The potential recession looming, the price of crude Oil companies continued to spend hundreds
Permian Basin is the driver of American oil — which settled Thursday just above $95 of millions of dollars to purchase land in New
and natural gas production, accounting for per barrel — is still attracting buyers even as Mexico’s side of the Permian Basin in the
over 40 percent of our oil production and 15 deals slowed. southeast corner of the state, as demand for
percent of our natural gas production. A non- Private equity sellers made up around 80 fossil fuel production in the region continue
attainment designation would significantly percent of the quarter’s deal value, according to grow amid the world’s recovery from
burden producers in the Permian, slowing to Enverus. The research firm notes the deals COVID-19 and international market tensions.
production and reducing supply from the would have slowed down even more without Earthstone Energy, based in The
largest secure source of energy in the world. the onslaught of private equity-backed sales. Woodlands, Texas, announced June 28 it
This region serves as a key geopolitical tool “As anticipated, the spike in commodity bought all of the oil and gas assets in the
for the United States and our allies, and it is prices that followed Russia’s invasion of western Delaware sub-basin of the Permian
inconceivable that the EPA would attempt to Ukraine temporarily stalled mergers and owned by Titus Oil and Gas Production for
limit production when American consumers acquisitions as buyers and sellers disagreed on about $627 million.
and families are facing record high energy the value of assets,” said Enverus Intelligence That included a production capacity of
prices.” Research director Andrew Dittmar in about 31,800 barrels of oil equivalent per day
OA ONLINE a statement. “High prices, though, also and 44 well sites, and 7,900 acres in Eddy and
encouraged a rush by private equity firms to Lea counties.
Ahead of the sale, Titus ran three rigs
drilling six wells in Lea County, with
completions expected in late 2022, per the
announcement.
Earthstone said it plans to maintain two
rigs in the Delaware and was considering a
third along with two in the eastern Midland
sub-basin.
Following the sale, Earthstone’s Delaware
Basin presence grew to 44,000 acres – about
256,000 acres basin-wide.
CEO Robert Anderson said the sale was
intended to build Earthstone’s portfolio in the
Permian Basin – the U.S.’ busiest oilfield –
and followed other acquisitions in the region
announced earlier this year.
“We had a goal of adding to our recently
established Northern Delaware Basin position
and are excited about this transaction and
the drilling inventory we are acquiring as it is
among the highest economic locations in the
Permian Basin,” Anderson said.
“We continue to pursue synergies from

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