The wave of M&A activity in South Texas appears to have yet to arrive. Over the past two months, Chesapeake Energy announced two deals totaling $2.825 billion that will nearly complete its planned exit from the Eagle Ford, and signal the arrival of UK-based INEOS in the basin and a more than doubling of WildFire Energy’s production there. Just as important, Western Canada’s Baytex Energy unveiled a $2.5 billion plan a few days ago to acquire Ranger Oil, an Eagle Ford E&P pure play, to triple its production in South Texas and gain its first operating capacity in the US and international interest in the basin does not end there: Spanish energy giant Repsol, which previously acquired a stake in an Eagle Ford partnership held by Norway’s Equinor, recently bought the assets of the basin of the Japanese INPEX. (How’s that for M&A?) On today’s RBN blog, we discuss the latest round of E&P acquisitions and sales in South Texas, where production has been on the rise.
In the first half of the 2010s, the Eagle Ford was in its prime, with the Permian and offshore Gulf of Mexico for the No. 1 spot in crude oil production and the then-preeminent Haynesville for top honors in natural gas outlet But the mid-decade slump in oil and gas prices hit the Eagle Ford harder than any other U.S. producing area, and it didn’t bounce back the way those other basins did, for a number of reasons. Recently, however, M&A activity in the shale play has picked up, suggesting that the Eagle Ford may finally be poised for a serious and sustained comeback.
As we said last fall Part 1, crude oil and natural gas production in the Eagle Ford peaked at about 1.7 Mb/d and 7.4 Bcf/d, respectively, in the mid-2010s, then fell, rebounded a little and (like almost all basins) it turned upside down. with covid Over the past few months, however, oil and gas production in South Texas has shown new signs of life, averaging about 1.2 Mb/d (a near record) of 7.3 Bcf/d, respectively , in February (blue and orange lines). , respectively, in Figure 1 below). On this blog, we also discussed the slew of M&A activity taking place in South Texas, including Marathon Oil’s $3 billion purchase of Ensign Natural Resources’ Eagle Ford assets, the $1.8 billion acquisition of Validus Energy by Devon Energy and a number of smaller deals by smaller players. .
