$20 Billion in Deals Shift Focus from New Drilling to Existing Assets Amid $100 Oil

Oil prices have surged past $100 per barrel for the first time in years, prompting a shift in deal activity towards existing assets and pipelines. In North America, four recent deals worth around $20 billion have targeted mature producing wells and infrastructure.

The Enbridge (ENB) acquisition of Tallgrass Energy's crude oil business for approximately $2.55 billion is one such example. This purchase includes stakes in the Pony Express and Powder River Gateway systems as well as 8.4 million barrels of storage, which will be funded by an equity offering and a separate $600 million Salt Creek Midstream gathering acquisition.

Williams (WMB) has also completed its $5.5 billion acquisition of Momentum Midstream, adding about 6 bcf/d of Haynesville gathering capacity. Diversified Energy (DEC) agreed to buy Birch Permian for around $1.8 billion, expecting a 35% increase in production and a 55% boost in adjusted EBITDA.

The Tamarack Valley (TVE) and Headwater (HWX) merger, valued at $10 billion, will create a pure-play Clearwater producer. This all-stock deal sees Tamarack issuing approximately 237.8 million shares and planning for a 20% dividend increase, subject to closing conditions.