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There’s been a frenetic scramble among oil and gas producers lately to acquire top-tier acreage and production assets they think they will need to survive and thrive. Some of that is still being done through smaller deals, but the expansion mode of choice for most has been big-time M&A. In today’s blog, we discuss Devon Energy’s recently announced $5 billion acquisition of Grayson Mill Energy, yet another private-equity-backed E&P cashing in on the smart moves it had been making. https://lnkd.in/gDCHpYjG

Crescent Energy Building Eagle Ford Natural Gas, Oil Portfolio in Friendly Merger with SilverBow https://ift.tt/bWdEheq Houston-based Crescent Energy Co. has agreed to tie-up with cross-town rival SilverBow Resources Inc. to create one of the largest exploration and production companies in the Eagle Ford Shale of Texas, loaded with natural gas, liquids and oil opportunities. The estimated $2.1 billion transaction, announced Thursday, comes about a month after activist investor Kimmeridge Energy Management Co. LLC withdrew its contested takeover of SilverBow. The combination among like-minded explorers would elevate Crescent to the top tier of Eagle Ford producers, second only to EOG Resources Inc. Pro forma output for 2024 is estimated at roughly 250,000 boe/d, weighted 44% to natural gas, 39% to oil and 17% to natural gas liquids. [Forward Look: Quickly understand where the price of natural gas is headed with these graphic day-on-day comparisons of NGI’s forward curves at 70 locations. View Now.] “We’re both oil-weighted in terms of the drilling we’re doing today and the future opportunity, but we love adding even more high quality, gas-weighted locations to be opportunistic from a capital allocation perspective,” Crescent CEO David Rockecharlie said.  SilverBow earlier this year reduced its natural gas output in the Eagle Ford in response to low commodity prices. However, optionality is key, Rockecharlie said. SilverBow’s portfolio “stacks up really well with ours, which means we would drill their high quality inventory…and we think we’ve got lots more of it than we had prior to this transaction.” Commodity Price ‘Optionality’ The new inventory “also adds significant optionality to commodity prices, with a valuable mix of both gas- and oil-weighted locations, allowing advantage to capital allocation flexibility through the commodity cycles,” the CEO said. Will Crescent’s natural gas marketing position be affected by the transaction? And could gas drilling ramp up if prices were to improve? “It’s all about value with us and, and I think we’ve got a great inventory of locations that are proven,” Rockecharlie said. “We know what we’re going to get and…we don’t make quick moves up when prices get better… “Fundamentally, the Crescent approach is, when prices are going up, that creates a lot more free cash flow, and that should be for the benefit of the shareholders. So we wouldn’t be adding rigs, but we move the allocation of capital around to the highest areas of return, so we love the optionality” that SilverBow’s assets have.  Rockecharlie said, “we try to make sure we get control of our capital. We don’t go out and chase lease expiration, we don’t do exploration, per se…We don’t want to take on assets that have significant challenges getting product to market.” That said, “we feel great getting invested in more natural gas opportunities at these prices. And I think the combined business will have a better marketing position...

Reunited and It Feels So Good for TXO Energy New basin entries by oil and gas producers seem to be having a moment right now. Stories always compelling to explore—especially if their core assets happen to lie primarily in the almighty Permian or aren’t the result of an acquisition inheritance. Reese Energy Consulting today is following the latest leap outside the Perm by Midland and Delaware players betting more than a buck or two on fresh territory and inventory to expand their portfolios. We shared last week Denver-based SM Energy Company’s $2.55 billion deal with XCL Resources and a welcome howdy into the Uinta Basin that came as somewhat of a surprise for most folks. Now, Fort Worth-based TXO Partners, which operates a combined 371,000 net acres in the Texas and N.M., Permian and San Juan, has hopscotched into the Williston with two acquisitions valued at $300 million. But it’s not exactly their first rodeo there. The company, which went public last year, is led by CEO Bob Simpson—shale veteran and former CEO of XTO Energy who built a Bakken powerhouse before selling to Exxon back in 2010 for $41 billion and finding a comfortable nest in the nation’s most prolific basin. Still, an old friend has a way of wooing one back.   Simpson’s return to the Williston with TXO includes acquisitions of Eagle Mountain Energy Partners and an undisclosed seller with assets in N.D., and Montana. They add 4.5 MBOED in production and proved developed reserves of 17 MMBOE. TXO in 1Q announced sales volumes of 22 MBOED. Some past romances are hard to forget. What do you think? Learn more about REC and our oil and gas consulting services in the Permian and Williston at https://lnkd.in/ewhkGFa and our natural gas online training courses at https://lnkd.in/ggd3UkJM.

Reunited and It Feels So Good for TXO Energy New basin entries by oil and gas producers seem to be having a moment right now. Stories always compelling to explore—especially if their core assets happen to lie primarily in the almighty Permian or aren’t the result of an acquisition inheritance. Reese Energy Consulting today is following the latest leap outside the Perm by Midland and Delaware players betting more than a buck or two on fresh territory and inventory to expand their portfolios. We shared last week Denver-based SM Energy Company’s $2.55 billion deal for XCL Resources and a welcome howdy into the Uinta Basin that came as somewhat of a surprise for most folks. Now, Fort Worth-based TXO Partners, which operates a combined 371,000 net acres in the Texas and N.M., Permian and San Juan, has hopscotched into the Williston with two acquisitions valued at $300 million. But it’s not exactly their first rodeo there. The company, which went public last year, is led by CEO Bob Simpson—shale veteran and former CEO of XTO Energy who built a Bakken powerhouse before selling to ExxonMobil back in 2010 for $41 billion and finding a comfortable nest in the nation’s most prolific basin. Still, an old friend has a way of wooing one back.   Simpson’s return to the Williston with TXO includes acquisitions of Eagle Mountain Energy Partners and an undisclosed seller with assets in N.D., and Montana. They add 4.5 MBOED in production and proved developed reserves of 17 MMBOE. TXO in 1Q announced sales volumes of 22 MBOED. Some past romances are hard to forget. What do you think? Learn more about REC and our oil and gas consulting services in the Permian and Williston at https://lnkd.in/ewhkGFa and our natural gas online training courses at https://lnkd.in/ggd3UkJM.

Another large acquisition in the oil and gas sector. Devon Energy has purchased Grayson Mill Energy. This follows the trend of companies strategically consolidating to position themselves for future growth. Since the beginning of 2023, there has been over $300 billion in M&A deals in the US. Q1 2024 saw ~$50 billion in deals. #oilandgascompanies #mergersandacquisitions #willistonbasin #bakken #graysonmillenrgy #devonenergy #oilandgas #upstream #oilandgasacquisitions

 U.S. natural gas producer Chesapeake Energy Corp. has approached Southwestern Energy, a peer valued by the stock market at $12 billion including debt, about a potential acquisition, people familiar with the matter said. Were the two companies to combine, they would overtake EQT Corp as the largest natural gas-focused exploration and production company in the U.S. by market value, at a time when shale companies are seeking scale and efficiencies. Southwestern's shares ended trading on Tuesday up 8.3% at $7.33 on the news, at their highest finish in almost a year. Chesapeake's shares closed up 0.7% at $89.59.

Congrats to the NOG - Northern Oil & Gas, Inc. (NYSE: NOG) team on their latest splash in the NonOp space! SM Energy Company with NOG as its non-op partner, recently announced that they are purchasing the Uinta Basin assets of XCL Resources (an EnCap PortCo) for a combined unadjusted purchase price of $2.55 billion in cash. NOG will be acquiring an undivided 20% stake in the XCL Assets for $510.0 million in cash. The current production is >10,500 Boed (2-stream, excluding NGLs, >85% oil) across ~9,300 net acres, located primarily in Duchesne and Uintah Counties, Utah. The next 12 months unhedged cash flow from operations, post-closing (assuming 10/1/24 start date) is expected to be >$170 million, based on recent strip prices, representing a transaction multiple of <3.0x.

US natural gas producer Chesapeake Energy has approached Southwestern Energy, a peer valued by the stock market at $12bn including debt, about a potential acquisition, Reuters reported. Were the two companies to combine, they would overtake EQT as the largest natural gas-focused exploration and production company in the US by market value, at a time when shale companies are seeking scale and efficiencies. Southwestern's shares ended trading up 8.3% at $7.33 on the news, at their highest finish in almost a year. Chesapeake's shares closed up 0.7% at $89.59. #MergersAcquisitionsDivestitures #Energy #OilandGas

Civitas Resources, an independent, domestic oil and gas producer, agreed to acquire the Midland Basin assets from Vitol-backed Vencer Energy, LLC, an oil and gas company that invests in and operates large producing assets, for $2.1bn. “This was a unique opportunity to capture high-quality oil assets at a very attractive price. In recent months, we have created a quality, scaled position in the heart of the Permian Basin. We continue to advance our strategic pillars by adding premium inventory, increasing Free Cash Flow, and delivering the industry’s best cash returns to shareholders. Upon closing, our portfolio will be balanced between the Permian and DJ basins, which reduces operational risk and makes us a stronger and more sustainable enterprise.” Chris Doyle, Civitas President & CEO. Civitas Resources (led by Chris Doyle and Marianella Foschi) is advised by Bank of America, J.P. Morgan, RBC Capital Markets, Kirkland & Ellis, and DrivePath Advisors. Vencer Energy (led by Don Dotson and Tray Black) is advised by Latham & Watkins. #MergersAcquisitionsDivestitures #OilandGas #Energy