The Permian Basin is continuing to emerge as the seat of activity for potential large-scale mergers and acquisitions. Home to several incumbent players looking to absorb neighbours exhibiting weak operational performance, the Permian presents an ideal case for screening rumoured opportunities using our North American Well Analysis Tool.
In light of Concho Resources rumoured bid for Clayton Williams and Anadarko's interest in acquiring Apache, it's no small leap to assume the Permian Basin will be the seat of multiple large-scale corporate acquisitions in the near term.
Last week's Upstream Week in Brief called attention to a trend of smaller, more incremental mergers and acquisitions (M&A) deals in the Permian, but as more interest surfaces among larger players, it's clear the region could play host to some major transactions that could be just around the corner.
The Permian is home to a number of incumbent players looking to consolidate acreage positions and build contiguous lease packages that support longer laterals with enhanced completions. Companies looking to acquire are eyeing targets with histories of underperformance — also the driving force behind Anadarko's pursuit of Apache.
Concho has focused on drilling longer laterals to improve well productivity and operational performance on its southern Delaware Basin properties, where Clayton Williams holds neighbouring acreage. More active and technologically advanced than Clayton Williams, Concho boasts EURs nearly twice as large, which could suggest that it's employing a similar acquisition strategy to Anadarko.
Using our North American Well Analysis Tool, we expand on this workflow, comparing the average type curve of wells in the Southern Delaware Basin for both Concho and Clayton Williams. Our recent Insight, "Screening for success," offers an in-depth look at using our tool to screen Permian opportunities.
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