Good morning, here's what the Oilman has for you today:

• Exxon In Talks to Buy Pioneer

• The EV Battery Plant that Delayed the End of Coal in Kansas

• Upcoming Oil and Gas Events

• Tweet of the Day

Exxon In Talks to Buy Pioneer

Exxon and Pioneer Natural Resources are in talks to combine their businesses.

The deal could be worth a whopping $60 billion.

The biggest deal since Mobil

The tie-up, if it goes through, would be the biggest acquisition deal in the oil industry since 1998, when Exxon merged with Mobil.

It will also be a fitting development for a sector that has turned to acquisitions for growth.

This is much easier and low-risk than investing in output expansion.

And, of course, Exxon and the others have the money to go shopping big after the record profits of 2022.

It would probably drive environmentalists mad, but who cares?

If completed, the acquisition will make Exxon the biggest player in the Permian.

Right now, these are, in order, Chevron, Conoco, and Pioneer itself.

Another M&A wave rising

Dealmaking in the shale patch has been on the rise since the start of the year.

The record profits that most oil producers made last year definitely have something to do with that.

However, the consolidation drive was much more about growth in a risky environment.

Industry executives have repeatedly indicated they’re not drilling at will any longer.

The uncertain regulatory environment, a hostile administration, transitions—you name it, the industry worried about it.

So if you don’t want to grow organically, you’ll grow inorganically, simple as that.

Pioneer itself did it in 2020 when it bought Parsley Energy and in 2021 when it snapped up DoublePoint Energy.

Consolidation in the shale patch is well and truly underway at a scale not seen for a very long time.

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The EV Battery Plant that Delayed the End of Coal in Kansas

A $4-billion EV battery plant in Kansas has delayed the phaseout of coal in the state.

The facility needs reliable and affordable energy, and coal is the only source for it.

The black truth about the green transition

The battery plant is a project of Panasonic, which broke ground on it last year.

The company is investing $4 billion in the project, but it stands to get a lot more than that under the IRA.

More precisely, Panasonic stands to receive $6.8 billion in subsidies from Biden’s transition honeypot.

But EV battery production is an energy-intensive business…

…, and it seems wind and solar can’t cut it.

So, Kansas authorities are delaying the shutdown of a local coal plant so it can supply the Panasonic factory with cheap, reliable electricity.

The only question, then, is how green EVs are if their batteries are made with the active participation of coal.

It’s just the start

There is a veritable rush to build EV battery plants across the U.S.

This means a surge is coming in electricity demand.

If the Kansas situation is any indication, a lot more coal and gas power plants could get an extended lease on life.

Environmentalists won’t be happy, but it’s just another illustration of why you can’t have your cake and eat it too.

EV production is energy-intensive, and that’s not changing anytime soon.

Neither is the fact that hydrocarbons basically have no alternative except nuclear.

Upcoming Oil & Gas Events

• October 8-10: New Mexico Oil & Gas Association Annual Meeting, Santa Fe, NM

• October 12: Arkansas Independent Producers & Royalty Owners Association Annual Meeting, Little Rock, AR

• October 12: Indiana Oil & Gas Association Annual Meeting, New Harmony, IN

• October 12: Oklahoma Oil and Gas Expo, Bennet Event Center, Oklahoma City, OK

• October 16: Fall Classic Golf Tournament, Ratliff Ranch Gold Links, Odessa, TX

Around the Global Patch

🇪🇺 Europe's solar manufacturing struggles.
🇨🇳 China's EV boom fuels India's oil ambitions.
🇳🇴 Norway's Okea launches offshore production at Hasselmus.

Tweet of the Day

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