After a record-breaking 2023, 2024 will also be a year full of agreements and collaborations in the oil & gas sector. And, once again, the great protagonist will be the Permian Basin of the United States
The wave of M&A (mergers and acquisitions) – which mainly affected shale oil operators in the Permian Basin of the United States – after a record-breaking 2023, does not seem willing to stop. Globally, $2.5 trillion in deals were completed last year, according to PwC.
THE PERMIAN BASIN OIL AGREEMENT BETWEEN MATADOR AND AMEREDEV II PARENT
Matador Resources Company announced the acquisition of Ameredev II Parent’s Permian Basin oil and gas properties for $1.9 billion. The deal includes a 19% stake in Piñon Midstream and enhances Matador’s existing portfolio with high-quality assets in Lea County, New Mexico, and Loving and Winkler counties, Texas. With this acquisition – we read on Oilprice -, the surface area of Matador’s Delaware basin will reach 76,900 net acres, producing over 180,000 boe (barrels of oil equivalent) with proven reserves exceeding 580 million boe.
The acquisition is strategically important for Matador, as it increases its asset base, production capabilities and free cash flow potential, and strengthens its position in the prolific Permian Basin, particularly the Delaware sub-basin, known for its high production rates and substantial reserves. The addition of 13,500 net acres and 431 managed drilling sites enhances Matador’s operational scale and future drilling inventory. The increased production capacity and proven reserves underline the company’s growth trajectory and market valuation, which could now exceed $10 billion.
Noble will acquire Diamond Offshore Drilling in a $1.6 billion cash and stock deal, adding 12 offshore vessels to its fleet and expanding the total number of rigs to 41. This acquisition offers an 11.4% premium to the price of Diamond’s stock closing, and is expected to bolster the company’s revenue and cash flow, amid a favorable offshore drilling market. The deal, achieved through $600 million in new secured financing, promises pre-tax cost synergies of $100 million, with significant benefits expected within one year of closing in early 2025.
THE AGREEMENT ON HYDROGEN BETWEEN TOTALENERGIES AND AIR PRODUCTS
TotalEnergies has signed a 15-year agreement with Air Products to annually supply 70,000 tonnes of green hydrogen to its Northern European refineries from 2030. This agreement, aimed at decarbonising TotalEnergies’ refineries, will help avoid around 700,000 tonnes of hydrogen emissions. CO2 per year and is part of the French major’s strategy to reduce net greenhouse gas emissions by 40% by 2030. Additionally, TotalEnergies will supply Air Products with 150 MW of solar power from a project in Texas, with plans for additional collaborations in the renewable energy sector in the UK, Poland, and France.
NextDecade has signed a non-binding agreement with Saudi Aramco to supply 1.2 mtpa of LNG for 20 years from its Rio Grande LNG plant in Texas. The agreement is in line with Aramco’s strategy to expand its presence in the LNG market, coinciding with the expected global growth of liquefied natural gas of 50% by 2030. The agreement, subject to a final investment decision on Train 4 scheduled for late 2024, is part of NextDecade’s broader efforts to improve its LNG export capabilities.
THE DISCOVERIES AND DEVELOPMENT OF THE CNOOC AND WOODSIDE OIL FIELDS
The China National Offshore Oil Corporation (CNOOC) has discovered a major hydrocarbon deposit in the ultra-deep waters of the South China Sea. The Lingshui 36-1 gas field, located at an average depth of 1,500 meters, showed a production capacity of more than 10 million cubic meters per day. This discovery, described as “a major exploration breakthrough,” addresses significant engineering and technical challenges and expands the resource base in the South China Sea for CNOOC. The discovery is fundamental for increasing natural gas reserves and production, allowing the Chinese company to improve its energy supply capabilities.
Woodside has begun extracting oil from the Sangomar offshore field in Senegal, after years of delay. The field, located 100 km south of Dakar, operates at a depth of 780 meters and has a storage capacity of 1.3 million barrels, with production expected to reach 100,000-125,000 barrels per day. This development is set to significantly boost Senegal’s economy, providing substantial revenue and reducing national energy bills. Jointly owned by Woodside (82%) and Senegal’s Petrosen, the project – with a first phase cost of around $5 billion – marks a key step in transforming Senegal’s economic landscape through the oil and gas industry .
COLLABORATION ON GAS AND OIL BETWEEN CHINA AND PAKISTAN
During a recent visit to China, Pakistan’s Prime Minister and Chinese President Xi Jinping agreed to develop offshore oil and gas blocks and boost Pakistan’s mining industry. The collaboration follows Pakistan’s recent gas and condensate discoveries in Sindh province, indicating a strategic move to bolster the country’s dwindling oil reserves, which could run out within the next decade.
The deal comes in the context of Pakistan’s heavy dependence on imported crude oil, similar to that of India, and its dwindling foreign reserves. China – which has already lent Pakistan $65 billion for infrastructure projects – is expected to finance the exploration, reflecting Beijing’s continued influence and investment in Pakistan’s energy sector.
