Permania! Why M&A in the Permian Basin is at fever pitch
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The Permian Basin has attracted nearly one-quarter of global M&A spend 2016. No tight oil play has ever seen such a constant buzz of activity. So how did US$20 billion in deals happen in a down market?
Permian tight oil has presented a unique attraction to investors: breakevens as low as US$40 per barrel, stacked pay potential, large volumes, upwardly trending well economics and the flexibility to adapt to a changing market. A deep pool of well-funded buyers and a notable amount of private equity sellers have made Permian tight oil the world's most liquid upstream M&A market.
Breaking down 'Permania'
Permania! Why tight oil M&A is at fever pitch
Right now, the Permian Basin is the only properly functioning M&A market globally. Acquisition spend of over $20 billion accounts for a quarter of global upstream M&A 2016 year-to-date. Buyers are accessing the most attractive barrels on the planet. We examine what impact this is having on valuations, and consider what lies ahead.