Exxon Mobil ‘s (XOM) planned deal to buy Pioneer Natural Resources (PXD) has sparked talk of more consolidation in the oil-and-gas industry. While we don’t own companies as mergers-and-acquisition plays, the potential for more tie-ups could have significant implications for our remaining oil name: Coterra Energy (CTRA). It’s unclear which shoe will drop next now that Pioneer — the largest independent producer in the Permian Basin, a key U.S. oil field in West Texas and New Mexico — is effectively off the market in an all-stock deal valuing the company at roughly $60 billion . But analysts expect the acquisition by Exxon, the most valuable U.S. oil-and-gas company at nearly $450 billion in market capitalization, to have ripple effects on producers of all sizes. “Consolidation is critical for the sector. It’s healthy. It’s needed, and I think you’ll see more of it,” said Gabriele Sorbara, an analyst at Siebert Williams Shank & Co. The consolidation could take multiple shapes, as companies seek scale and bolster the amount of quality land they own to drill on in the future. On the one hand, investors are looking at bigger U.S. players such as Chevron (CVX) and ConocoPhillips (COP), wondering whether they’ll follow Exxon’s lead and acquire smaller exploration-and-production (E & P) firms. Chevron’s market cap is around $324 billion, while ConocoPhillips is worth roughly $152 billion, based on Thursday’s stock prices. Another possibility could be that E & P companies further down the valuation ladder choose to pursue deals that make their own inventory positions more attractive to investors, according to Nitin Kumar, senior analyst at Mizuho Securities. Companies in this basket could include Coterra, Devon Energy (DVN) and Diamondback Energy (FANG). Coterra is valued at roughly $22.4 billion Thursday, while Devon and Diamondback are valued at $31.7 billion and $30.5 billion, respectively. “I’m not proposing there’s going to be a big wave of M & A, necessarily. But if scale is what matters, your options are limited,” Kumar said. He added: “You can choose to either go your own way…you can look at the small public guys and pick off a few assets there, or you could look at mergers of equals and say, ‘Hey look, let’s two of us get together and now we create a competitive position with 800,000, 900,000 acres into play.'” That would be roughly on par with Pioneer’s more-than-850,000 acres in the Permian Basin. “All those should be options that these guys should be thinking about strategically,” Kumar argued. Devon Energy is reportedly doing just that. In recent months, the Oklahoma City-based company has held preliminary talks with Marathon Oil (MRO) about a potential tie-up , Bloomberg reported after the close Wednesday , citing people familiar with the matter. Houston-based Marathon is valued at nearly $18 billion, as of Thursday. Devon has also eyed privately held CrownRock, which operates in the Permian, according to Bloomberg. In recent years, publicly traded E & P companies have adopted a more muted approach to production growth — bowing to investor pressure after spending heavily to pump more oil in the 2010s proved unkind to energy stocks as crude prices pulled back. Now, the priority is generating more sustainable cash flows that can be returned to investors through buyback programs and dividends. The shift has generally been positive for the stock prices of oil companies. Expense reduction is another way to satisfy investors, and is likely a major motivation behind any further consolidation that might occur in the sector, said Scotiabank analyst Paul Cheng. Smaller companies may not solve their inventory backlog problems by combining, Cheng said, “but that certainly could provide them additional room to reduce costs.” At the time the Exxon-Pioneer deal was announced, Jim Cramer’s Charitable Trust owned a position in Pioneer. We sold our entire stake Monday, and will consider redeploying some of the cash into Coterra on future pullbacks in its stock price. Our investment in Coterra has been rooted in its attractive fundamentals as an E & P play with sizable exposure to both oil and natural gas — not its viability as a takeover target, or even a buyer itself. Indeed, owning Coterra in the hopes that a larger company may swoop in and offer a big premium would not be a wise strategy. That’s because a substantial premium might never materialize — as we saw with Exxon’s valuation of Pioneer. The industry’s newfound restraint on production makes it harder to justify paying up for a company, analysts say, compared with the premiums paid in the early days of the U.S. shale boom a decade ago. “If you go back to 2014, 2016, in those deals it was asset acquisition driven by growth. Today, it’s asset acquisition driven by not volume growth, but cash flow sustainability and longevity. It’s a little bit of a different motivator,” Mizuho’s Kumar said. (Jim Cramer’s Charitable Trust is long CTRA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Permian Basin rigs in 2020, when U.S. crude oil production dropped by 3 million a day as Wall Street pressure forced cuts.
Paul Ratje | Afp | Getty Images
Exxon Mobil‘s (XOM) planned deal to buy Pioneer Natural Resources (PXD) has sparked talk of more consolidation in the oil-and-gas industry. While we don’t own companies as mergers-and-acquisition plays, the potential for more tie-ups could have significant implications for our remaining oil name: Coterra Energy (CTRA).
In a joint statement, French and German economists have called on governments to adopt “a common approach” to decarbonize European trucking fleets – and they’re calling for a focus on fully electric trucks, not hydrogen.
France and Germany are the two largest economies in the EU, and they share similar challenges when it comes to freight decarbonization. The two countries also share a border, and the traffic between the two nations generates major cross-border flows that create common externalities between the two countries.
And for once, it seems like rail isn’t a viable option:
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While rail remains competitive mainly for heavy, homogeneous goods over long distances. Most freight in Europe is indeed transported over distances of less than 200 km and involves consignment weights of up to 30 tonnes (GCEE, 2024) In most such cases, transportation by rail instead of truck is not possible or not competitive. Moreover, taking into account the goods currently transported in intermodal transport units over distances of more than 300 km, the modal shift potential from road to rail would be only 6% in Germany and less than 2% in France.
That leaves trucks – and, while numerous government incentives currently exist to promote the parallel development of both hydrogen and battery electric vehicle infrastructures, the study is clear in picking a winner.
“Policies should focus on battery-electric trucks (BET) as these represent the most mature and market-ready technology for road freight transport,” reads the the FGCEE statement. “Hence, to ramp-up usage of BET public funding should be used to accelerate the roll-out of fast-charging networks along major corridors and in private depots.”
The appeal was signed by the co-chair of the advisory body on the German side is the chairwoman of the German Council of Economic Experts, Monika Schnitzer. Camille Landais co-chairs the French side. On the German side, the appeal was signed by four of the five experts; Nuremberg-based energy economist Veronika Grimm (who also sits on the National Hydrogen Council, which is committed to promoting H2 trucks and filling stations) did not sign.
With companies like Volvo and Renault and now Mercedes racking up millions of miles on their respective battery electric semi truck fleets, it’s no longer even close. EV is the way.
On today’s tariff-tastic episode of Quick Charge, we’ve got tariffs! Big ones, small ones, crazy ones, and fake ones – but whether or not you agree with the Trump tariffs coming into effect tomorrow, one thing is absolutely certain: they are going to change the price you pay for your next car … and that price won’t be going down!
Everyone’s got questions about what these tariffs are going to mean for their next car buying experience, but this is a bigger question, since nearly every industry in the US uses cars and trucks to move their people and products – and when their costs go up, so do yours.
New episodes of Quick Charge are recorded, usually, Monday through Thursday (and sometimes Sunday). We’ll be posting bonus audio content from time to time as well, so be sure to follow and subscribe so you don’t miss a minute of Electrek’s high-voltage daily news.
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GE Vernova has produced over half the turbines needed for SunZia Wind, which will be the largest wind farm in the Western Hemisphere when it comes online in 2026.
GE Vernova has manufactured enough turbines at its Pensacola, Florida, factory to supply over 1.2 gigawatts (GW) of the turbines needed for the $5 billion, 2.4 GW SunZia Wind, a project milestone. The wind farm will be sited in Lincoln, Torrance, and San Miguel counties in New Mexico.
At a ribbon-cutting event for Pensacola’s new customer experience center, GE Vernova CEO Scott Strazik noted that since 2023, the company has invested around $70 million in the Pensacola factory.
The Pensacola investments are part of the announcement GE Vernova made in January that it will invest nearly $600 million in its US factories and facilities over the next two years to help meet the surging electricity demands globally. GE Vernova says it’s expecting its investments to create more than 1,500 new US jobs.
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Vic Abate, CEO of GE Vernova Wind, said, “Our dedicated employees in Pensacola are working to address increasing energy demands for the US. The workhorse turbines manufactured at this world-class factory are engineered for reliability and scalability, ensuring our customers can meet growing energy demand.”
SunZia Wind and Transmission will create US history’s largest clean energy infrastructure project.
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