The Future of the Oil Industry: ConocoPhillips’ Next Move

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The oil industry is experiencing a surge of megadeals, with companies like Exxon Mobil and Chevron making noteworthy acquisitions. According to analysts at KeyBanc, ConocoPhillips may be the next major player planning a significant purchase.

Chevron’s proposed acquisition of Hess has resulted in both Chevron and Exxon Mobil closing deals worth $60 billion or more (including debt) this year alone.

ConocoPhillips, currently the third-largest U.S.-based energy company, has yet to make a substantial deal in 2021. KeyBanc analyst Tim Rezvan sees ConocoPhillips as the most prominent candidate for oil and gas consolidation.

Despite being a key player, ConocoPhillips has a market value that is less than half that of Exxon or Chevron. This makes it challenging for them to pursue the larger targets, such as Occidental Petroleum.

Instead, Rezvan suggests that ConocoPhillips may focus on incremental acquisitions in the Permian Basin. Diamondback Energy and Matador Resources are potential options that would significantly boost ConocoPhillips’ production.

Alternatively, ConocoPhillips could explore opportunities with private companies like Endeavor Energy Resources. Analyst Joseph Sykora from AptusCapital Advisors highlights that there have been talks surrounding the acquisition potential of private players in the Permian Basin, particularly Endeavor, for the past decade.

It will be interesting to see how ConocoPhillips maneuvers in this changing landscape to solidify its position as a key player in the oil industry.

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