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Are We in The Golden Age of A&D for Energy? A Recap of Hart Energy’s Outlook

Oct 26, 2021

At the recent Oil & Gas Investor’s A&D Strategies and Opportunities Conference, a one-day event for producers and operators, financial experts, and capital providers, a keynote speech was delivered by Doug Reynolds, Managing Director at Piper Sandler.

A few topics discussed included:

A&D Transaction Trends

  • The exploration and production acquisitions and divestitures (E&P A&D) market has experienced a substantial increase in the activity volume in 2021 and had the best year since 2014 due to the active buyer universe.
  • New basin entrant acquirers, including Validus Energy and Vitol, represent over $20 billion of value, nearly half of the overall activities.
  • Overall, it is a healthy market since there are activities across many basins.
  • Many of the international companies are selling and only a small number of them are buying. More sales are expected by end of this year.
  • Private and private equity backed companies are leading sellers of assets year-to-date, and public companies are the most active buyers.
  • The Permian Basin represents over 50% of year-to-date deal value.

Outlook and Predictions

  • More transactions are expected to happen which is supported by the relative commodity price strength.
  • The active assets sale market is projected to be over $50 billion in 2021 and over $40 billion in 2022.
  • A considerable number of activities are projected in the next couple of years.
  • Public companies need to continue to gain scale inorganically through acquisition.

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