Energy Analytics Financial Services

Permian gears up for M&A bonanza as PE steers toward the exits

byAndrew Dittmar

This article originally appeared in the Enverus Weekly Market Pulse Report.

Last week’s $4.3 billion acquisition of three Midland Basin-focused EnCap portfolio companies by Ovintiv was the biggest Permian deal since ConocoPhillips bought Shell’s assets in September 2021 and kicked off 2Q23 M&A with a bang. Ovintiv shareholders didn’t seem to mind the scale and price tag of the transaction in the least, as the company’s stock rallied 12% after the deal was announced and finished the week up 8%. See more in Enverus Intelligence® | Research’s Deal Insight report.

The sales come on top of an already strong market for private equity sellers in the Permian with the late 2022 sales of FireBird Energy and Lario Oil & Gas assets to Diamondback Energy, plus EnCap’s sale of Advance Energy Partners to Matador Resources earlier this year. Private equity firms are hoping public company enthusiasm for deals remains intact, as last week saw a torrent of media reports that firms were launching processes. EnCap will be looking to continue its sales streak by taking Novo Oil & Gas and Forge Energy II into the market. Both operate in the Delaware Basin with Novo focused on the northern and western portions of the play while Forge operates in the south. Peer NGP will also be looking to cash in, per reports that it is marketing Tap Rock Resources I and II, also in the Delaware, and Hibernia Resources III in the southern Midland Basin. The sales efforts are likely motivated by the confluence of strong pricing for inventory — more than $2 million per location for the best drilling opportunities — and an optimal time in the lifecycle of these companies to exit. While these sales processes were almost certainly planned ahead of OPEC’s surprise production cut a week ago, that adds further fuel to the fire and increases the probability of $100-plus oil this year.

These firms aren’t necessarily exiting oil and gas, with Reuters also reporting that EnCap is looking to raise another upstream fund for the first time in years. However, whether because of a lack of opportunities in maturing shale plays or a lack of capital, the portfolio of private equity E&Ps isn’t being replenished at nearly the pace M&A is drawing it down. The result is a far more consolidated Permian Basin and other areas where the rich get richer as large companies with significant cash are in the best position to compete for deals.

The next logical step after private consolidation is deals among the public companies themselves. Even the biggest Permian independent isn’t immune to buyout rumors as, along with the PE-focused M&A talk last week, The Wall Street Journal reported that Pioneer Natural Resources had held some preliminary talks to be acquired by ExxonMobil. All of this seems to point toward an industry that looks increasingly like it did before shale in the context of the biggest companies and majors holding the best, lowest-cost resource. Watching that unfold should certainly provide plenty of fireworks along the way.


Interested in receiving more information like the article above? Fill out the form below to learn more about Enverus Intelligence Publications, your source for daily, weekly, and monthly news and highlights about the energy industry.

About Enverus Intelligence Publications
This news is brought to you by Enverus Intelligence Publications. With so many voices in the market, it is hard to know who to trust. Enverus Publications provides daily, weekly and monthly detailed summaries that cut through the noise, delivering timely insights across various topics from a source who understands the energy industry.

Andrew Dittmar

Andrew Dittmar

Andrew Dittmar is a Director on the Enverus Intelligence team. Andrew specializes in deal analysis, research and valuations for upstream assets. He focuses largely on placing individual deals into context around broader industry trends and outlooks, and has been quoted by Reuters, CNBC, the Wall Street Journal, Houston Chronicle and other media outlets. Andrew holds a BBA in Finance from Texas A&M University and a JD from The University of Texas School of Law.

Subscribe to the Enverus Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Related Content

Enverus Blog - Coterra’s big Permian projects defy degradation worries
Intelligence Oilfield Services
ByJoseph Gyure, Editor, Enverus Intelligence

In the biggest oilfield services transaction since 2016, SLB agreed to acquire ChampionX Corp. for $7.76 billion in stock, bringing an industry leader in production chemicals into the OFS giant’s fold. ChampionX’s $420 million in net debt brings the transaction...

Geoscience Analytics
ByDai Jones

Offshore drilling is a complex and multifaceted process essential for accessing oil and gas reserves beneath the seabed. Exploration drilling is the initial phase, crucial for identifying potential oil or gas reservoirs. It involves the deployment of mobile drilling units...

ByBryn Davies

Did you know that Enverus now has 18 offices around the world, with the most recent addition of the Brno office in Czechia

available transfer capacity
Energy Transition
ByRiley Prescott

Renewable integration has experienced a remarkable surge in Texas, with the installation of more than 9 GW of renewable capacity in 2023 alone.

ByPhillip Dunning

Are you considering buying mineral rights in Texas? Before you take the next steps, familiarize yourself with the comprehensive information we've presented in this blog post.

Analyst Takes Generative AI

The energy sector is definitely drawn to the potential of artificial intelligence (AI). The promise of making things work better and more efficiently is too tempting to ignore.

Enverus News Release - Utility growth prospects: Quantifying long and short opportunities
Analyst Takes Power and Renewables
ByRob Allerman

For much of March, the California Independent System Operator (CAISO) experienced significant fluctuations in power prices due to congestion, transmission outages and bearish pricing trends in SP-15. My team used Panorama to better understand and the Power Market Publications in...

Energy Transition
ByCarson Kearl

One of the most common and important questions for the power sector today is what impact artificial intelligence and the data centers needed to generate it will have on energy consumption.


Midstream is caught between a rock and a hard place. On one hand, gathering and pipeline operators, processors, storage and energy marketers face abundant opportunities and challenges when meeting customer demand.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Sign up for our Blog

Register Today

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert