Deals & debt shake up energy landscape

Merger and acquisition activity in the U.S. exploration and production sector has surged over the last 18 months.

All but seven of the top 20 producers in the country are expected to expand in 2024 and 2025, according to Evaluate Energy Senior Analyst Mark Young in his latest analysis. (This is based purely on the latest production figures from assets or companies that are being acquired.)

The operational integration following a deal can take time so we may not see aggregate output jump immediately for all companies.

? Noteworthy - Big companies getting bigger

• ExxonMobil's $64-billion acquisition of Pioneer Natural Resources will add around 700,000 boe/d of fresh output, for an adjusted 4.5 million boe/d production rate.
• Chevron's purchase of DJ-Basin focused PDC Energy and the $60-billion acquisition of Hess Corp. would adjust its Q1 production to over 3.7 billion boe/d.
• ConocoPhillips' $22.5-billion deal to acquire Marathon Oil will take the company closer to 2.5 million boe/d.

Read the complete analysis here.

?? Using debt strategically

Smaller U.S. companies are increasingly turning to debt to keep up and stand out in this ever-changing landscape, where M&A deals are happening thick and fast.

Earnings for small operators have fallen below the highs of 2022 so they are using debt to maintain capital budgets and shareholder buybacks.

Some producers have taken on large amounts of debt in early 2023, so they have begun to prioritize debt repayments.

Read more here.

?? Bonus read - Coal vs. Natural Gas: How North American fuel could be a game changer for emerging economies

?? Next month: Our analysts examine the key performance trends across the upstream sector based on Q2 2024 results.

Evaluate Energy Insights is a must-read for anyone looking to stay on top of the latest data-based trends and developments.

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