Insight
Permian supply risk: consolidation creates new activity signals
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Permian portfolios are churning. Deal spend in H1 already eclipsed last year’s entire figure. The majority of transaction value this year has been in the form of public E&Ps consolidating ten high-growth private companies. But something stands out in this chapter of Wolfcamp A&D. Buyer plans to slow growth and cut rigs on their acquired assets have intensified. At least 11 rigs will be available because of consolidation alone. This is atop the already established trend of Permian rig count sliding since late April. Typically, any available Permian rig would be re-contracted immediately. But independents are guiding toward stable activity, the Majors’ plans are already made, and fewer privates are being funded to grow. In a scenario where these rigs drift to other basins or simply return to activity at a slower cadence, Permian growth slows even more dramatically than our base case calls for.
Table of contents
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Executive summary
- Scooping up high-growth private companies
- Buyer mindset
- While cutting rigs isn’t new, it’s become severe
- Next year’s growth feels the impact
- Other factors compound into the wider Permian numbers
- Bridging the gap
- Reiterate the base case
Tables and charts
This report includes the following images and tables:
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Notable 2023 Permian transactions with private sellersPermian private sellers oil production growth (gross operated volumes)Permian 2023 rig count changes: acquisition and post-closing plansLost production from dropped rigsPermian base case vs. declining rig count scenario
What's included
This report contains:
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