Quiver Quantitative - ConocoPhillips (NYSE:COP), a Houston-based titan in the oil and gas sector, is reportedly contemplating a bid for CrownRock, a significant energy producer in the Permian basin's west Texas territory. This move comes amidst a broader trend of consolidation sweeping the energy sector. As the second-largest U.S. oil and gas producer, trailing only behind giants Exxon Mobil Corp (NYSE:XOM) and Chevron Corp (NYSE:CVX), ConocoPhillips has indicated its eagerness to partake in the acquisition of CrownRock, a private entity with an estimated worth ranging between $10 billion and $15 billion.
Several other prominent names in the industry, including Diamondback Energy (NASDAQ:FANG), Devon Energy (NYSE:DVN), Marathon Oil (NYSE:MRO), and Continental Resources, are also reportedly examining potential bids for CrownRock. However, sources have emphasized that a finalized deal with any of these contenders remains uncertain, with the possibility of new players entering the bidding arena. Reflecting the sensitive nature of these discussions, the involved companies, except CrownRock, Continental, and Diamondback, have refrained from commenting.
The competitive landscape for oil and gas producers has seen heightened pressure to amplify their footprints through strategic acquisitions. This urgency became particularly pronounced following Exxon's massive $60 billion acquisition of Pioneer Natural Resources Co (NYSE:PXD) and Chevron's $53 billion deal with Hess Corp (NYSE:HES). CrownRock, with its impressive expanse of approximately 86,000 net acres situated in the Permian's northern Midland basin, is an enticing prospect for potential buyers. The company, under the leadership of Texan billionaire Timothy Dunn, has the backing of the private equity heavyweight Lime Rock Partners.
Recent developments also shed light on the intricate dynamics of the industry. Reports last week alluded to Devon considering a bid for CrownRock and hinted at preliminary discussions between Devon and Marathon concerning a potential merger. These negotiations, which unfolded over the summer, ultimately terminated in August due to disagreements over deal terms.
This article was originally published on Quiver Quantitative