Texas Land and Market Update | RR District 1-6 | Q4 2023

Originally published in AAPL Landman Magazine 

Looking back at the oil and gas industry in 2023, it may be remembered as the year of mega-mergers/acquisitions, or the year of the “Fear of Missing Out” (FOMO). Once Exxon acquired Pioneer Natural Resources for $60 Bn, FOMO took hold as Chevron acquired Hess for $53B, Exxon then purchased Denbury for $4.9B, Chevron purchased PDC for $7.8B, and Oxy purchased Crown Rock for $12.0B. Other large independents joined the party such as Permian Resources, Civitas, and Ovintiv made several acquisitions for a combined purchase price of ~$15B. FOMO is still alive in the oil patch as rumors of Devon looking to buy Marathon and Chesapeake buying Southwestern Energy. The downside to these acquisitions will be a loss of jobs as positions are consolidated in all the acquiring companies. The upside will be far more contract jobs for independent Landmen as companies hire firms like Cinco to assist in divesting some of their assets while other companies will need due diligence to help acquire them.

Exxon Acquisitions

Exxon’s acquisitions were not pure oil and gas. Their purchase of Denbury, the largest carbon capture utilization and storage company in the country will add a tremendous amount of infrastructure to Exxon’s already rapidly growing carbon capture and storage business on the Gulf Coast. Exxon is not only diversifying into carbon capture and storage, but it also acquired rights to produce lithium from brine located in Smackover formation in Southern Arkansas. Exxon expects that by 2030, they will produce enough lithium to supply manufacturers needs for one million EVs a year.

Drilling Activity

The Drilling activity in Railroad Districts 1-6 has changed very little in the last quarter. Most oil and gas landmen are engaged in some tasks related to clearing title for drilling, renewing, or extending leases. There were a couple significant acquisitions in RR Districts 1-6 with Tokyo Gas Natural Resources purchasing Rockcliff Energy’s Haynesville assets for $2.7B, and in the Eagle Ford, Devon bought Validus Energy for $1.8B.

Renewable Energy Developments

In the renewable and transition energy space, there are a number of new solar developments, carbon capture and storage projects, and in the northeast corner of the state in RRD 6, lithium projects as the Smackover formation continues west from Arkansas to Texas. The utility scale solar farms range from 4,000 acres to 70,000 acres in South Texas. These projects provide jobs for landmen including running title, negotiating surface use, accommodation agreements, damage settlements, pipeline ROWs, and lease agreements. We are hearing from other land service companies that they need more landmen to go to the field to talk with landowners and other stakeholders to negotiate leases and other agreements related to oil and gas, renewable energy and carbon capture.