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Up to $1.5 Billion for Percussion Petroleum in the Permian Basin07/11/2022
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.
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Callon Acquires $1.1 Billion Delaware Assets and Bows Out of Eagle Ford - Here's What You Need to Know
Callon is set to purchase Percussion Petroleum's Delaware assets for $475 million while selling its Eagle Ford assets to Ridgemar for $655 million. In a strategic step to optimize its operations, Callon Petroleum recently made headlines by sealing two deals on May 3, totaling a staggering $1.13 billion. The company is taking confident steps to bolster its presence in the Delaware Basin while bidding farewell to its stake in the Eagle Ford Shale.
The future of shale is looking bright: economic recovery and a spike in travel lifted oil prices to multi-year highs, helping Continental Resources to a fourth-quarter profit that exceeded Wall Street expectations. Coming off such a high note, the company plans to increase its dividend rates by 15% to 23 cents per share!
Rangeland Energy has agreed to sell Rangeland Midstream Canada to Kingston Midstream Alberta and remains committed to future Canadian midstream investments. Texas-based Rangeland Energy, supported by financial partner EnCap Flatrock Midstream, has inked a deal to sell its Canadian subsidiary, Rangeland Midstream Canada Ltd., to Calgary's Kingston Midstream Alberta Ltd. for cash.
The merger between ONEOK and Magellan received approval from Magellan shareholders, securing just 55% of the total votes at Magellan’s meeting on Sept. 21. ONEOK Inc. has successfully concluded the acquisition of Magellan Midstream Partners LP on Sept. 25. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.
Viper Energy's deal, comprised of cash and equity, secures an additional 2,800 net royalty acres in the Midland Basin and 1,800 in the Delaware Basin. Viper Energy Partners LP, a Diamondback Energy Inc. subsidiary, has inked a deal to acquire mineral and royalty interests in the Permian Basin. The deal, valued at around $1 billion, is with Warwick Capital Partners and GRP Energy Capital. Viper was established by Diamondback with the purpose of owning, purchasing, and capitalizing on oil and natural gas assets in North America, specifically targeting mineral and royalty interests.