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Up to $1.5 Billion for Percussion Petroleum in the Permian Basin

Around 25,000 net acres in the Permian shale basin are being sold by Percussion Petroleum II, looking to fetch up to $1.5 billion, as some sources bet on rising oil prices to pocket more than double what it paid in 2021.

Percussion, a Houston-based oil and gas company, produces over 10,000 bopd from approximately 100 wellbores across 20,000+ net acres in Loving, Ward, and Winkler County in the Delaware Basin.

The company spent $375 million plus contingent payments a year ago to buy the bulk of its assets in one of the most prolific crude-producing areas in the U.S. from Oasis Petroleum Inc.

The oil prices increased to triple digits and buyers wanted to gain a toehold in the basin, whereas backers of private shale companies such as Percussion use it as a chance to exit their investments with big profits.

Remarkably, U.S. crude oil futures have grown about 50% to approximately $109/bbl since June 29, 2021, when Percussion closed its deal with Oasis.

Since Percussion has been founded in 2020 with investment from private equity firm Carnelian Energy Capital, it generates around 21,000 boe/d from more than 375 drilling locations.

The company expects the growth of production of 33,000 boe/d by the end of the year from the asset as the company is now working with an adviser for the sale of assets. Percussion and Carnelian did not give any answers to commenting requests. Private equity firm Old Ironsides Energy, also an investor in Percussion, refused to comment.

Being a part of the Delaware formation, Percussion’s assets have been among the most active and favorable regions for multibillion-dollar deals in recent months. The Permian Basin, spread over Texas and New Mexico, is forecast to set a record production of 5.316 million bbl/d in July.

In June, a well-known oilman Harold Hamm proposed to take Continental Resources Inc. private at a valuation of more than $25 billion, several months after it entered the Permian Basin by purchasing Delaware Basin acreage from its rival.

Meanwhile, Centennial Resource Development Inc. decided to merge with Colgate Energy Partners in May to form a $7 billion Permian-focused oil producer. So if you are further interested in learning more about detailed report concerning different energy companies in the Permian Basin, please, contact our Houston sales office or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business. Tel. +1 713-203-3128 Email: treitmeier@hartenergy.com

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Targa Resources: $3.55 Billion Cash Transaction to Acquire Lucid Energy

On June 16 Targa Resources Corp. decided to acquire Lucid Energy Group, located in the Permian Basin, which is a part of Riverstone Holdings LLC and Goldman Sachs Asset Management. Firstly, Targa enlarged due to the recent “blot-on” acquisition of Southcross Energy in the Eagle Ford for $200 million and it will become bigger thanks to the $3.55 billion cash transaction. Targa’s financial position allowed it to utilize convenient opportunities to extend its company so it bought #Lucid using available cash and debt with an estimated pro forma year-end 2022 leverage around 3.5 times. According to Targa’s estimates, the acquisition of Lucid will increase the number of natural gas pipelines by 1,050 miles and add about 1.4 Bcf/d of cryogenic natural gas processing capacity in service or under construction located mainly in Eddy and Lea counties of New Mexico. The investment-grade producers source approximately 70% of current system volumes. According to the press release, a full-year standalone adjusted EBITDA is expected to be between $2.675 billion and $2.775 billion and reported year-end leverage ratio of about 2.7 times. Targa’s updated financial expectations assume NGL composite prices average $1.05 per gallon, crude oil prices average $100/bbl, and Waha natural gas prices average $6 per MMBtu for the remainder of 2022.

Crestwood & Oasis Midstream merge to create a top Williston #basin player. $1.8 billion deal is expected to close during the Q1 of 2022. The transaction will result in a 21.7% ownership stake for Oasis in Crestwood common units. The remaining ownership of Oasis in Crestwood will also be of benefit to the company since it will create a diversified midstream operator with a strong balance sheet and a bullish outlook after this accretive merger.

Enbridge acquired Tres Palacios natural gas storage facility in Texas for $335 million, adding approximately 35 Bcf of natural gas storage to their portfolio. The facility uses salt caverns for storage and has a gas header pipeline system that spans 62 miles and links to 11 major gas pipelines. Crestwood Equity Partners LP intends to divest its interests in Tres Palacios by the second quarter.

The U.S. natural gas pipeline network is a complex system of pipelines that transport natural gas from production areas to consumers across the country. The pipeline network consists of three main types of pipelines: gathering pipelines, transmission pipelines, and distribution pipelines. Gathering pipelines are small-diameter pipelines that transport natural gas from production wells to processing facilities or larger transmission pipelines. Transmission pipelines are large-diameter pipelines that transport natural gas over long distances, sometimes across multiple states. Distribution pipelines operate at low pressure and are located in or near urban areas. They are often referred to as "utility pipelines" because they are typically owned and operated by local gas utility companies.

Diamondback Energy, an independent oil and gas company, has successfully completed the acquisition of Lario Permian, marking the closure of two major deals in the fourth quarter of 2022. The company purchased two private operators in the Midland Basin for approximately $3.3 billion.

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