The completion of the merger between Centennial Resource Development Inc. and Colgate Energy Partners II LLC happened on Sept. 1, sealing the debut of Permian Resources Corp., which is considered the largest pure-play E&P company in the Delaware Basin. Permian Resources’ idea was to combine two successful E&P companies, creating a better, stronger, and more strategically compelling company. Centennial and Colgate announced an agreement to merge in May, denying rumors that Colgate, a privately held independent Midland-based company, had been seeking an IPO. The merger estimated Colgate at about $3.9 billion and consists of 269.3 million shares of Centennial stock, $525 million of cash, and the assumption of approximately $1.4 billion of Colgate’s outstanding net debt. Permian Resources, being the combined company, has a deep inventory of “high-quality” drilling locations on around 180,000 net acres the companies anticipate will provide more than $1 billion of free cash flow in 2023 at current strip prices, in accordance with the company release on Sept. 1.

Earthstone Energy Inc., based in Texas, announced the transaction on June 28: the acquisition of Titus Oil&Gas which will raise production in the Delaware Basin by 26%. The $627 million acquisition fills the Permian Basin in Eddy and Lea counties, N.M. with 86 net locations on 7,900 net acres of leasehold, while it is not clear how much of the leasehold might be on federal acreage It is Earthstone’s seventh acquisition since 2021, a span that includes the closing of approximately $1.89 billion in acquisitions in the Permian Basin. The purchase of Titus Oil & Gas Production LLC and Titus Oil & Gas Production II LLC, privately held companies backed by NGP Energy Capital Management LLC, is estimated at $575 million in cash and it is the equivalent of $52 million in stock (3.9 million shares of its Class A common stock based on the June 24 closing price). Titus shared that its net production in June was 31,800 boe/d. The company had reserves of approximately 28.9 MMboe. Earthstone is sure its net production will increase, at the midpoint, by 20,500 boe/d (65% oil) in the fourth quarter.

Around 25,000 net acres in the Permian 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. 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 PetroleumInc. 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.

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.

Matador Resources Co. acquires a gathering and processing system for $75 million in New Mexico’s Eddy and Lea counties from Summit Midstream Partners LP, filling up Matador’s midstream portfolio in the Permian Basin. Matador reached an agreement with a subsidiary of Summit to gain Summit’s Lane Gathering and Processing System on June 9. Nowadays, the Lane G&P System combines a 60 MMcf/d cryogenic natural gas processing plant, three compressor stations, and about 45 miles of natural gas gathering pipelines. As an investor presentation says, Matador began its initial midstream build-out in the Delaware Basin in 2015-2016. Since then the company has extended its midstream footprint in the Delaware using the San Mateo I and San Mateo II joint venture partnerships with Five Point Energy LLC

Great Western Petroleum's assets will be acquired by PDC Energy for $1.3 billion. Via this deal, PDC Energy’s position in the D-J basin increases roughly to 230,000 net acres. Denver-based Great Western has core operations in Weld and Adams counties in Colorado with 54,000 net acres and about 55,000 boe/d (42% oil / 67% liquids) of PDP. As part of the agreement, the acquisition will be financed by issuing 4 million shares of common stock to existing Great Western shareholders and by providing $543 million in cash to the company. All in all, PDC expects to increase its total production by 25% and its oil production by 35% as a result of the deal. The deal should also result in some synergies including a 15% reduction in overall cost per BOE.

Exxon Mobil Corp. is weighing prospects of selling its assets in North Dakota’s Bakken, after gauging interest from potential buyers — 5 billion is the issue price, at least according to rumors. The price point came about after the news that the oilgiant is in the final round of hiring bankers to help launch the sale. Yet Exxon Mobil itself stays tight-lipped regarding the situation.

Canada is looking at ways to increase pipeline utilization to boost crude exports as Europe seeks to reduce its reliance on Russian oil At the moment, oil exports from Canada to the U.S. are approximately 4 million barrels of oil per day, with a portion reexported to other countries. At the end of 2021 Canadian oil companies exported a record amount of crude from the U.S. Gulf Coast, mostly to big importers India, China, and South Korea. And this will only increase in the future.

In light of the conflict in Ukraine, buyout firms are currently scurrying to make cash from the U.S. crudeprices reaching their highest level since 2008. And one of the largest privately-owned US-based oilproducers may be up for sale. EnCap Investments looks to sell its portfolio company Ameredev II for over $4 billion including debt. It’s important to note, however, that both EnCap and Ameredev II alike are staying tight-lipped on the matter.

And Petro-Hunt E&P is the new sheriff in town with 21,430 net acres of leasehold in the Basin, production of which surpasses 7,000 bbl/d and 100 MMcf/d respectively. To take advantage of it, Petro-Hunt plans to begin an active development drilling program on these assets in the coming months heavily upgrading the numbers of its 775 operating oil wells and contributing to over 8,100 non-operated wells. Time will tell, however, whether or not this move will be able to deliver such results.

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!

Enterprise decided to go in on the Permian Basin. With the surprise purchase of Navitas Midstream for $3.25 billion in cash, the company gained a foothold in the Midland Basin, as it previously lacked #naturalgas or NGL infrastructure apart from downstream pipelines in the region. Enterprise estimates that distributable cash flow accretion will be in the range of $0.18 to $0.22 per unit in 2023, while simultaneously supporting additional capital returns to their limited partners through distribution growth and buybacks of common units.

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.

Comstock Resources decided to go through with asset divestment, selling its Bakken Shale actives for $150M to Northern Oil and Gas. The proceeds from these sales will be reinvested by Comstock Resources Inc. into the Haynesville Shale, at which point the company may acquire additional leasehold and fund drilling activities starting in 2022. Meanwhile, Northern clearly gunning for the pack leading position in the Texas shale play, but whether they succeed or not is remains to be seen.

Pioneer Natural resources is looking to divest properties in the lone star state. According to Rextag, Pioneer’s Delaware assets on sale have a trailing 12 month production of just over 22 MBOE against a total Permian Basin production of almost 212 MBOE. (The sale, if it happens, will effectively lead to a 10% decrease of Pioneer’s asset base in terms of the previous year's production.)

Midstream companies seek partnerships, connect their most robust assets to the fastest growing markets. Let us see what they did this past February