The oil industry is poised for a new wave of megadeals, following the recent acquisitions by Exxon Mobil and Chevron. Analysts at KeyBanc suggest that ConocoPhillips may be the next company to make a significant purchase in this competitive landscape.
Chevron's planned acquisition of Hess has resulted in both it and Exxon Mobil agreeing to deals worth over $60 billion, including debt, so far this year. Meanwhile, ConocoPhillips, as the largest potential player in oil-and-gas consolidation, has yet to strike a major deal in 2021, as stated by KeyBanc analyst Tim Rezvan.
While ConocoPhillips currently holds the position of the third-largest U.S.-based energy company, its market value is significantly lower than that of Exxon or Chevron. As a result, it may face challenges in targeting the largest potential acquisitions like Occidental Petroleum.
However, Rezvan suggests that ConocoPhillips may instead pursue incremental acquisitions in the Permian Basin to boost its production. Diamondback Energy and Matador Resources are potential targets that could have a meaningful impact on ConocoPhillips' output.
Alternatively, ConocoPhillips may explore opportunities with private companies like Endeavor Energy Resources, particularly in the Permian Basin. As Joseph Sykora, an analyst at AptusCapital Advisors, noted, Endeavor has been a speculated acquisition candidate for over a decade.
In conclusion, the oil industry is witnessing a flurry of megadeals, and ConocoPhillips is positioned to join in with its own strategic acquisitions. By focusing on smaller targets and exploring partnerships with private companies, ConocoPhillips aims to enhance its production capabilities and drive growth in this dynamic sector.