Chief Executive Officer Ryan Lance is predicting more shale mergers and acquisitions amid a dearth of investment in the industry — but his company won’t take part unless a highly compelling deal is on the table.
(Bloomberg) — Chief Executive Officer Ryan Lance is predicting more shale mergers and acquisitions amid a dearth of investment in the industry — but his company won’t take part unless a highly compelling deal is on the table.
“We don’t have to do anything,” Lance said Wednesday in a Bloomberg TV interview. “In fact, the hurdle is quite large for us. It’s really tough to transact at this point in the cycle with the commodity price the way it is.”
More consolidation in the shale sector could potentially extend the life of drilling acreage in the oil-rich Permian Basin of West Texas and New Mexico, giving producers the scale to boost output. Lance and other shale bosses in recent months have said the best land to drill in the Permian is likely to run out by the end of the decade.
While some companies are drilling second- and third-tier acreage, “fortunately, the depth and duration of our portfolio, we’ve not gotten to that point,” Lance said.
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