By Gerson Freitas Jr.
Date announced | Permian deal | Value per acre (USD) |
---|---|---|
March 2018 | Concho Resources-RSP Permian | 75,504 |
August 2018 | Diamondback Energy-Ajax Resources | 33,008 |
July 2019 | Callon Petroleum-Carrizo Oil & Gas | 16,547 |
December 2019 | WPX Energy-Felix Energy | 11,965 |
October 2020 | ConocoPhillips-Concho Resources | 10,471 |
Source: Bloomberg Intelligence
“Low equity prices and the need for investor support is motivating many operators to look for new options to merge,” Rystad senior analyst Alisa Lukash wrote in a report Thursday.
READ: Biggest U.S. Gas Producer Seeks More M&A After Chevron Deal
Industry-wide costs for drilling and completing wells will probably drop as much as 5% next year because of consolidation, increased standardization and a drop in service costs, Rystad said. Even more capital will be allocated to the most prolific Permian acreage, the firm said.
Permian-focused Concho’s drilling rights were valued at about $10,471 per acre in the proposed ConocoPhillips takeover announced last month, according to Bloomberg Intelligence. That compares with $75,504 an acre for Concho’s purchase of RSP Permian Inc. in 2018.
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Canadians Should Decide What to do With Their Money – Not Politicians and Bureaucrats