Active rigs in the Permian Basin have declined by 69 rigs (-19%) so far in 2023, mostly as a result of rig reductions following mergers and acquisitions (M&A) in the past 12-18 months. A rumored deal between CrownRock and Occidental Petroleum (OXY) would likely contribute to this down trend.
The Wall Street Journal reported on talks between OXY and the private producer. CrownRock is one of the top 5 private E&Ps by rig count in the Permian Basin, so a potential acquisition by OXY could slow future production growth on its acreage. CrownRock operates more than 100 Mb/d of crude oil production in the Midland Basin and production has increased at a 21% CAGR over the past 5 years, according to supply data in Energy Data Studio (see figure).
East Daley recently reviewed rig activity by Permian producers involved in M&A, either as buyers or sellers, and found rig counts by the group had declined by nearly 30% in 2023. While ExxonMobil’s (XOM) $60B purchase of Pioneer Natural Resources (PXD) could buck the trend, mergers on balance have been a negative indicator for future supply.
In our upcoming Dirty Little Secrets annual report, East Daley will feature an analysis of how future E&P consolidation could impact production growth in the Permian Basin vs our base case forecast. – Ryan Smith Tickers: OXY, PXD, XOM.
Dirty Little Secrets is Coming December 13
Join East Daley on December 13 at 10 am MST for our Dirty Little Secrets annual webinar. In “Volatility Will Continue Until Morale Improves,” we will dive into the dynamics likely to drive volatility ahead in energy markets. We review commodity drivers in oil, natural gas and NGL and the midstream outlook. Our seasoned experts will dissect the key elements shaping the industry across multiple commodities. RSVP here to join us.
East Daley, Hart Bring NEW Gas & Midstream Weekly
East Daley is teaming up with Hart Energy on the NEW Gas & Midstream Weekly newsletter. This new report combines the strengths of Hart Energy's journalistic reporting and analysis on natural gas, LNG, midstream energy and deal-making with EDA's deep research and intelligence of hydrocarbons, storage and transportation.
Published every Thursday morning, this new powerhouse newsletter is an interactive and enlightening read highlighting breaking news, exclusive interviews, videos, charts, maps and more. The newsletter utilizes East Daley's Energy Data Studio tools for natural gas predictive analytics with Hart Energy's Rextag mapping tools to present a holistic view of pricing triggers, infrastructure growth, pipeline and processing bottlenecks, regulatory and legal hurdles, and the inevitable solutions.
Energy Data Studio
East Daley Analytics has launched Energy Data Studio, a platform for our industry-leading midstream data and commodity production forecasts. All clients have access to the new client portal. If you have not yet logged in, please fill out the form to request a registration email be resent.
Energy Data Studio leverages our G&P data set for insights into midstream assets across every major oil and gas basin in North America. Users can navigate detailed visual dashboards by region, pipeline, or individual asset to understand crude oil, natural gas and NGL supply at the most granular level.
Energy Data Studio is available through data downloads from the visual interface, in Excel files, or as a direct feed delivered into subscribers’ workflow via secure file transfer. To learn more about Energy Data Studio, please contact email@example.com.
The Daley Note
Subscribe to The Daley Note (TDN) for midstream insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.