![In this April 23, 2018, file photo, the logo for ExxonMobil appears above a trading post on the floor of the New York Stock Exchange. Exxon Mobil said Tuesday, March 5, 2019, that as soon as 2024 it expects to produce the equivalent of more than 1 million barrels of oil per day in the Permian Basin, which straddles western Texas and New Mexico, up from a forecast of 600,000 barrels by 2025. (AP Photo/Richard Drew, File)](https://thumbor.forbes.com/thumbor/960x0/https%3A%2F%2Fspecials-images.forbesimg.com%2Fdam%2Fimageserve%2F6701e0ad83014b9a9d8bef319cbf9c83%2F960x0.jpg%3Ffit%3Dscale)
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Exxon, Conoco warn of would-be sellers asking for too much
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Chevron walked away from Anadarko; Shell yet to strike deal
Big Oil probably won’t be buying up the Permian Basin’s struggling independent drillers any time soon.
Years
of costly exploration and frantic buying sprees have gutted shareholder
returns in the world’s largest shale basin. And management teams and
their financial backers can’t count on shale-hungry, cash-rich
supermajors to buy them out.
Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp.
and ConocoPhillips are all on record saying they are wary of scooping
up smaller rivals at a time when would-be sellers are demanding premium
payouts and global crude prices are under pressure from ample supplies.
There is “not always alignment among buyers and sellers,” Exxon Chief Executive Officer Darren Woods said
Wednesday. He suggested Permian drillers may have to be squeezed by
weak prices for a bit longer before they dial down their expectations.
“That’s often the case in a market, particularly in one that’s in transition,” Woods said.
Conoco CEO Ryan Lance has a similar view. There are “a lot of bid-ask issues sitting in the market today,” he said on May 23. “Expectations change” is what’s needed to stoke acquisition activity.
Shell has been on the hunt to bulk up in the Permian for some months but has yet to seal a deal. The Anglo-Dutch major was said to be in talks with privately-owned producer Endeavor Energy Resources LP in January.
Chevron walked
away from buying Anadarko Petroleum Corp. earlier this month after
being outbid by Occidental Petroleum Corp. “We’re serious about being
disciplined,” Chevron CEO Mike Wirth said.
Occidental may have ended up with a winner’s curse. Carl Icahn, the billionaire investor, sued Occidental on Thursday for its “fundamentally misguided and hugely overpriced” bid for Anadarko.
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