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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Looks like the cat is finally out of the bag. According to anonymous sources, ConocoPhillips is soon to acquire Midland, Texas-based Concho Resources—and by soon, we mean imminently. The deal would gift Conoco with an added 520,000 gross acres in the oil-rich Delaware and 280,000 in the Midland sub-basin, doubling the company’s current +800,000-acre Permian position. Together, Conoco and Concho produced 1.3 million BPD last quarter. No whispers of a potential price tag just yet, but Bloomberg reports Concho’s market value teeters somewhere around $8.7 billion compared with Conoco at $37 billion. This latest union follows the merger of equals in September between Oklahoma-based Devon and WPX for $2.56 billion and Chevron’s July purchase of Noble for $5 billion. Both acquisitions also were Permian-heavy. According to S&P Global, the biggest oil deals tend to follow oil price crashes. Factor in weak demand, market gluts, and a pandemic, and all signs point to culling the herd.
ConocoPhillips is a multinational corporation engaged in hydrocarbon exploration. It is based in the Energy Corridor district of Houston, Texas. The company has operations in 17 countries and has production in the United States, Norway, Canada, Australia, Timor-Leste, Indonesia, Malaysia, Libya, China, and Qatar.