In what could be a stunning one-two punch, Pittsburgh-based natural gas giant EQT looks to score two big prizes that would mark CEO Toby Rice’s first deals since being named to his post in July last year. The 38-year-old Rice already presides over the largest supplier of natural gas in the nation. With more than 1 million gross acres in the Marcellus and Utica, EQT is the undeniable juggernaut in Appalachia producing 4.1 BCFD and holding 15.1 TCF of proved reserves. Reese Energy Consulting today is following the latest news from EQT, which has announced it will acquire Chevron’s upstream and midstream assets in the Appalachian Basin for $735 million. EQT’s first offer was $750 million. The bolt-on deal includes 335,000 net acres in the Marcellus, 100 wells, a 31% interest in Laurel Mountain Midstream, and two water systems. Current net production is 450 MMCFD. But wait, there’s more. EQT also has made a takeover offer for CNX Resources that would make EQT the largest price setter in the region. With a market cap of $2.6 billion, CNX produces 1.38 BCFD. Can’t wait to watch this prize fight.
In its figurative term, “fandango” is a synonym to describe a “brilliant exploit.” For Houston-based Contango Oil and Gas, that may well sum up its rationale to scoop up Tulsa-based Mid-Con Energy in an all stock merger valued at $400 million. Reese Energy Consulting today is following the latest news from Contango, which will assume ownership of Mid-Con’s assets in Okla., and Wyo., after replacing Mid-Con as the operator of those assets in July. The deal is expected to close by early 2021, and pairs an E&P with a stated goal of “consolidating a sector that is in dire need of it” with another that offers high-value, low-decline oil and gas properties but has financially struggled. Mid-Con issued a “going concern” in August and posted an $11.9 million loss in 2Q. Contango also has reported a private-equity capital raise of $39.7 million from the sale of 26,451,988 shares of common stock to fund the Mid-Con acquisition. The company says it will relocate its headquarters to the DFW area. Contango’s onshore operations include 7,719 net acres primarily in Texas and Okla.
Contango Oil and Gas
Contango Oil & Gas Company is a Houston, Texas based, independent oil and natural gas company whose business is to maximize production and cash flow from its offshore properties in the shallow waters of the Gulf of Mexico and onshore properties in Texas, Oklahoma, Louisiana and Wyoming and, when determined appropriate, to use that cash flow to explore, develop, and increase production from its existing properties, to acquire additional PDP-heavy crude oil and natural gas properties or to pay down debt.
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With the ink barely dry on news that ConocoPhillips and Concho resources will marry in an all-stock deal valued at $9.7 billion, two more shale producers are in line to exchange vows. Reese Energy Consulting today is following reports that Texas-based Pioneer Natural Resources and Parsley Energy may soon tie the knot in another multi-billion-dollar transfer of ownership in the Permian. The coupling would create a $10 billion operator with combined production of more than 550,000 BPD. Dallas-based Pioneer is currently the largest acreage holder in the Cline Shale, part of the Permian’s Spraberry Trend in the Midland sub-basin, with more than 680,000 highly contiguous net acres. Following the sale last year of assets in the Eagle Ford and South Texas, Pioneer has put all its chips “on the best part” of the Midland. Permian-focused Parsley, whose CEO ranks as the youngest in the industry at age 36 and who previously worked for Pioneer, operates in both the Midland and Delaware. With a market value of about $4 billion, Parsley carries more than $3 billion in debt.
Pioneer Natural Resources
Pioneer Natural Resources Company is a company engaged in hydrocarbon exploration in the Cline Shale, which is part of the Spraberry Trend of the Permian Basin, where the company is the largest acreage holder. The company is organized in Delaware and headquartered in Irving, Texas.
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In hindsight, the $1 billion Petra Nova project seemed like a win-win: Create the world’s largest carbon capture facility next to one of the biggest power plants in Texas operating four coal-fired and four gas-powered units. Capture more than 90% of carbon dioxide from emissions produced in just one coal-fired unit. Pipeline the captured CO2 80 miles to an oilfield and boost production from 300 BPD to 4,000 BPD. What could possibly go wrong? Unfortunately for Houston-based NRG Energy, practically everything. After little more than three years, Petra Nova has been sunsetted indefinitely. When the plant worked, according to supporters, it worked as it was designed. But soon, mechanical problems and outages left it operational only one day in three. In the first few months this year, Petra Nova was operating at little more than 45.9% of capacity. Worse, the pandemic helped tank oil prices, demand, and crude oil output. Huge financial losses quickly followed. Petra Nova now has quietly suspended operations at the W.A. Parish Generating Station and lives to see another day when economic conditions improve
NRG Energy, Inc. is a large American energy company, dual-headquartered in Princeton, New Jersey and Houston, Texas. It was formerly the wholesale arm of Northern States Power Company, which became Xcel Energy, but became independent in 2000. NRG Energy is involved in energy generation and retail electricity.