Another Permian Giant May Be Forced To Consolidate Or Die

One by one they are starting to fall. The long predicted consolidation wave in U.S. shale players, particularly those with assets in the Permian stacked play, is in high gear. Just in the last month or so, Chevron, (NYSE:CVX) has taken out Noble Energy, (NYSE:NBL); Devon (NYSE:DVN) swallowed WPX Energy, (NYSE: WPX); ConocoPhillips, (NYSE: COP) snapped up Concho Resources, (NYSE: CXO), and just last night, Pioneer Exploration, (NYSE: PXD), announced it would merge with Parsley Energy, (NYSE:PE). Earlier this year in an OilPrice article, I wrote a detailed thesis for the future of shale that forecast the current wave of consolidation taking place. One key tenet that I postulated would come into play was “Economy of scale,” meaning that larger, well-established companies would snap up smaller ones with assets that would easily “bolt-on” to their acreage inventory. That seems to be the dynamic currently in play. Which brings us to the question as to…who is next?...MORE