The U.S. Permian Basin still offers attractive business opportunities, executives with FireBird Energy II LLC, Garrison Energy and Javelin Energy Partners said May 22 during Hart Energy’s SUPER DUG event in Fort Worth, Texas.
“I think there are a lot of overlooked assets still in the Permian,” FireBird Energy II LLC CEO Travis F. Thompson said during the panel titled ‘The Dealmakers’ Roundtable.’ “We’ve been focused on the Midland side… [and] we see it as a place where we can build another scaled business.”
Thompson said opportunities exist but companies need to go out and find them. He said his company looks at deals from all angles, including ESG and fixing deal shortcomings.
“The number of private equity companies that can write a check for $500 million is a third of what it was 10 years ago,” Thompson added.
Amid the opportunities in the Permian, the basin has to deal with the fact that a lot of capital has fled the sector. While many companies remain focused on returns, opportunities to make money and generate free cash flow and returns are still there.
The Permian covers an area some 250 miles wide by 300 miles long and is composed of over 7,000 fields in West Texas, with sub-basins including the Delaware and Midland. The Permian accounts for nearly 40% of all oil production in the U.S. and nearly 15% of its natural gas production, according to the Federal Reserve Bank of Dallas.
There is just less capital in the system now for oil and gas deals, Garrison Energy CEO Caleb Weatherl said during the discussion led by Deon Daugherty, editor-in-chief of Hart Energy’s Oil and Gas Investor magazine.
“[But] the money is there for some deals… the environment is becoming more favorable,” Weatherl said.
The panelist also talked about future challenges from the public side and what private companies would or could be acquired. The current environment creates an opportunity for the sector to either develop a large-scale cash flow business or a company to potentially be acquired by a public company, they said.
“My advice is always be for sale,” Javelin Energy Partners President & CEO John Jacobi said, despite the constant noise around the industry about it being on its last legs.
“I’ve heard that we’re running out of oil and gas for my whole career. Well, we’re still here,” Jacobi said.
2023-08-02 - SM Energy completed an acquisition in cash of 20,000 net acres in various Texas counties.
2023-08-23 - Prairie Operating Co. exercised an option to purchase more than 20,000 net acres in Weld County, Colorado.
2023-07-11 - Vital Energy is raising its outlook on oil and gas production and capital spending after completing a sizable acquisition in the Permian Basin.
2023-08-31 - Dorchester Minerals exchanged common units with a ballpark value of $10 million for 568 net royalty acres in three Texas counties.
2023-08-23 - OneRock purchased Northwoods Management Co.’s Powder River assets in Wyoming, which include production averaging about 5,000 boe/d.