January 18, 2017
Mergers and Acquisitions
Two monster deals were announced this week, with both acquiring companies expanding their positions in the Permian. Exxon Mobil, the world’s biggest publicly traded energy company has joined the land rush in the prolific Permian Basin, announcing Tuesday it will pay $5.6 billion in stock to acquire companies owned by Texas’ Bass family that control parts of the Permian in New Mexico. The purchase roughly doubles Exxon’s holdings in the basin, adding acreage with an estimated 3.4 billion barrels of oil equivalent. The assets are located in the Delaware Basin, part of the larger Permian. The adjusted per-acre price for Exxon’s purchase comes in at about $20,000.
Exxon’s deal also comes just one day after Noble Energy paid $3.2 billion, including debt, to buy Clayton Williams Energy. That acquisition focused on assets in the southern Delaware Basin in Texas, at a price of $33,000 per acre. The combination of these two companies will create the second-largest acreage position in the Southern Delaware Basin of the Permian Basin shale formation, Houston-based Noble said in a statement on Monday. The deal provides more than 4,200 drilling locations on about 120,000 net acres, with resources of more than 2 billion barrels of oil equivalent, Noble said. The company plans to increase its rig count to six from four in the Delaware by the end of the year.
CLOSING OIL AND GAS PRICES – JAN 17th.
Oil prices are under pressure as almost 1 billion barrels of oil held in inventories must be used up before global supply and demand are closer to balance, Dana Gas PJSJ Chief Executive Officer Patrick Allman-Ward said in Davos.
Brent crude settled at $55.47 and US crude futures WTI closed up slightly at $52.48 per barrel. Front-month gas futures for February delivery on the New York Mercantile Exchange settled at $3.41 per million British thermal units.
Our Featured Story: Technology and the Landman
This week we feature an informing article by Stephen Clayman addressing the impact of technology on landmen. It is without question that technological innovations have drastically altered the way that geologists and engineers perform their jobs. For the landman, change has been incremental. What are other ways that technology could increase efficiency in the land and legal side of our business? Will courthouse records ALL be digitized one day? What do you think, if implemented, would bring about the most significant change to the job of a field landman?
In keeping with Stephens article about technology and landmen, I am really excited to share a video with you from Evan Anderson, CEO at Oseberg, called UNLOCKING THE DISRUPTIVE POWER OF DATA. The company refines data that’s freely available in public records, into a digital, searchable format which clients can use to answer critical questions and Evan shares his thoughts on how Oseberg is bringing about change to our industry.
This past week, the total oil rig count finally fell after increasing for eleven consecutive weeks. The decline was spread across multiples basins but was made up of all vertical rigs. Several new horizontal and directional rigs were added during the week.
For more details on the latest national and state news regarding last Friday’s Baker Hughes rig count data, read our article, Rig Count, and check out the interactive rig count dashboard on the Oklahoma Index tab of our website.
Thank you for your continued support and keep an eye out for this week’s recap on Friday Snippets!