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The collapse in the price of oil in 2014-2016 triggered a Permian land rush, where drillers can produce crude oil at a break-even point comparable to that of other regions. With the best possible ground, energy companies are now turning to mergers and acquisitions to strengthen their positions in the underlying region of western Texas and eastern New Mexico.
This is illustrated in the Chevron-Anadarko Contract, which connects much of Chevron's Permian area in Culberson County, Texas, with Anadarko's holdings in the neighboring counties of Reeves and Loving. Wirth explains that Chevron plans to add more platforms, expand the drilling on the ground and introduce numerical analysis of his company on the ground held by Anadarko.
"It is clear that Anadarko's prized position in the Delaware Basin, where Chevron is increasing its position from 240,000 net acres to over 1,400,000 acres, is an important factor in the deal," said Andrew Dittmar , Mergers and Acquisitions Analyst at Drillinginfo. "The Delaware Basin currently offers the best economy on the shale market in the country."
According to sources, Occidental Petroleum also sought to take Anadarko. Occidental operates worldwide, but its operations in the US are focused on the Permian – including the Delaware Basin sub-region highlighted by Chevron.
The deal with Chevron will likely lead major oil companies to consider buying Permian players like Pioneer Natural Resources, EOG Resources and even Occidental, "said Dan Eberhart, CEO of Canary Oil Services.
"The purchase of Anadarko by Chevron is the first of a series of takeovers as oil companies are eager to evolve shale," Eberhart said in an e-mail . "It is almost always less expensive to drill oil on Wall Street than in the oil sector."
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