The oil industry looks to be embarking on a new wave of megadeals. After Exxon Mobil and Chevron’s acquisitions, ConocoPhillips could be the next company looking to make a big purchase, according to KeyBanc analysts.
Chevron’s
(ticker: CVX) planned acquisition of
Hess
(HES) means that both it and
Exxon Mobil
(XOM) have agreed to deals worth $60 billion or more, when including debt, this year so far.
ConocoPhillips is the biggest potential player in oil-and-gas consolidation which hasn’t struck a major deal this year, according to KeyBanc analyst Tim Rezvan.
ConocoPhillips
(COP) is the No. 3 U.S.-based energy company but its market value is less than half that of either Exxon or Chevron. That could mean it would find it hard to take on the largest potential targets such as Occidental Petroleum (OXY).
Instead, ConocoPhillips could seek incremental acquisitions in the Permian Basin, according to Rezvan. He cited
Diamondback Energy
(FANG) and
Matador Resources
(MTDR) as possible purchases that would meaningfully increase ConocoPhillips’ production.
Another option would be for ConocoPhillips to look at private companies such as Endeavor Energy Resources.
“There are private players in the Permian that have long been thought to be acquisition candidates – Endeavor has been talked about for the past decade,” said Joseph Sykora, an analyst at AptusCapital Advisors
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