Oil
A shale oil pump in Midland, Texas. — © Tamir Kalifa/nyt
A major wave of consolidation is sweeping the long-fragmented US shale oil sector. According to analysts, it is gradually maturing.
It is raining billions in takeovers in the American oil sector. With Diamondback Energy purchasing Endeavor Energy for an amount of 26 billion dollars (approximately 24.1 billion euros), as Diamondback announced on Monday, the fourth major deal is already announced in four months. The acquisition is expected to be completed in the fourth quarter of this year.
Diamondback will pay for the takeover with 8 billion euros and the issuance of 117.3 million new shares. The shareholders will own approximately 60.5 percent of the new company, the remaining 39.5 percent will be owned by the shareholders of Endeavor.
Both companies are based in Midland, Texas, and are also drilling for oil in the Permian Basin, the largest oil and gas field in the United States. The two companies will have a combined net area of 838,000 hectares and a net production of 816,000 barrels of oil, according to a statement.
Grow up
Several mergers have been announced in the American oil sector in recent months. Exxon will acquire Pioneer Resources for $60 billion and Chevron will pay $53 billion for the acquisition of Hess. Occidental Petroleum has also reached an agreement to buy CrownRock for nearly $11 billion.
That consolidation shows that the long-fragmented shale industry, which traditionally had few players of significant size and struggled to attract mainstream investors, is gradually maturing. It also shows how companies expect oil demand to continue to rise despite the energy transition.
2024-02-12 19:26:02
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