Vital Energy, in partnership with Northern Oil and Gas Inc., has struck a deal with private equity-backed Point Energy Partners to buy its Permian assets for $1.1 billion.
Vital Energy will acquire 80% of the assets, with the remainder going to Northern Oil and Gas. The transaction will be all-cash, Vital Energy said. The assets that Vital will acquire will add 30,000 bpd to its daily output and some 16,300 net acres to its total acreage.
The deal is the latest move in a continuing consolidation push in the shale space that has seen several megadeals over the past 12 months, including Exxon's acquisition of Pioneer Natural Resources and Chevron's acquisition of Hess Corp. The latter deal has run into trouble because of Exxon's insistence it has the right of first refusal over Hess' share of their Guyana operations.
Yet besides the mammoth deals of the supermajors, a slew of smaller deals have been marking the road to a more consolidated U.S. shale patch as independents seek to position themselves better against their larger rivals in a sector that is fast running out of untapped resources.
As a result, mergers and acquisitions in the U.S. oil and gas space hit a record of $51 billion in the first quarter of the year, per Enverus data, which also showed most deals targeted companies and assets in the Permian.
"The most likely outcome is all these deals get approved, but federal regulatory oversight may pose a headwind to additional consolidation within a single play," Enverus Intelligence Research principal analyst Andrew Dittmar said in April when the data was reported, as quoted by Reuters.
"Inventory scarcity is the top theme among E&Ps (exploration and production companies)," Dittmar added.
A lot of this inventory is in the hands of private equity-controlled companies whose PE owners are taking advantage of the strong demand for more assets to make their exit.
By Charles Kennedy for Oilprice.com
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