E&P Consolidation Trends: Anticipating Gassy M&A

Merger mania is sweeping the oil basins, but what about natural gas? Here’s how one analyst imagines potential E&P consolidation scenarios playing out for gascos.

Kashy Harrison, Simmons Energy

Tue, 12/29/2020 - 03:30 PM

E&P Consolidation Trends: Anticipating Gassy M&A

(Source: Hart Energy; Shutterstock.com)

With several recent public transactions, the long-awaited E&P consolidation wave has finally arrived in the oil patch. Gas has been quieter (partially due to fewer public companies) with Southwestern Energy Co.’s acquisition of Montage Resources Corp. representing 2020’s primary announcement. Nevertheless, as the cost of capital and uncertainty surrounding the terminal value for conventional energy increase, the necessity for cost reductions via consolidation is magnified.

Accordingly, we believe combinations between gas companies are a matter of when, not if.

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