Equity markets reward growth, but lenders value discipline. Viewing upstream performance through a credit analyst’s lens reveals how scale, costs, reserves, and prudent leverage drive both credit strength and enterprise value.
A weekly update on issues important to the oil and gas industry
Equity markets reward growth, but lenders value discipline. Viewing upstream performance through a credit analyst’s lens reveals how scale, costs, reserves, and prudent leverage drive both credit strength and enterprise value.
At Hart Energy’s 2025 A&D Strategies and Opportunities Conference in Dallas, two central themes emerged: the maturation of Tier 1 U.S. shale inventory and diverging dynamics between private and public players in dealmaking. The conference highlighted the evolving dynamics of the U.S. upstream oil and gas market. With Tier 1 shale assets maturing, private and public participants are behaving differently, and deal strategies have become more selective. Read more in this week’s post.
The One Big Beautiful Bill Act (OBBB) brings sweeping changes to the U.S. oil and gas industry. By revising tax rules, restoring leasing predictability, and lowering royalty rates, the Act reshapes project economics and carries significant implications for valuation and long-term investment.
Mercer Capital has its finger on the pulse of the minerals market. The most recent Mineral Aggregator Valuation Multiples Study is now available.
Q2 2025 earnings calls reflected an industry still guided by discipline but open to opportunity. OFS providers and E&P companies alike reiterated their focus on returning capital to shareholders and preserving balance sheet strength, while also pointing to selective international and offshore growth initiatives. The result is a sector cautious about near-term pricing and activity levels in North America, yet strategically positioning for selective long-term expansion. Read more in this week’s post.
The Dallas Fed Q2 Energy survey highlighted the growing uncertainty and continued pessimism in management sentiments across the sector. Given the concerns shared about the future of the oil and gas markets, it is more important than ever for a potential seller to be able to provide potential buyers with a clear picture of the company’s capacity for generating cash flows. In this week’s post, we highlight the value of a Quality of Earnings (QofE) analysis in the transaction process.
The Q2 2025 issue of Mercer Capital’s Exploration and Production Newsletter focuses on the Permian. The Permian basin continues to serve as the centerpiece of the U.S. shale revolution. However, the basin will face challenges in the near future as rising water and associated gas content are contributing to increased production costs, leading to more cautious drilling plans for basin operators.
Americans have been and continue to be hungry for energy, in any effective form they can get it, renewable or not. While a majority of Americans still prioritize renewables in energy policy, a shift is taking place, mostly among younger Republican and Republican-leaning individuals, according to a recent Pew Research Study. In this week’s post, we detail how this has been changing since the end of Trump’s first term in office and what the future may hold for renewable energy.
The economics of oil and gas production vary by region. Mercer Capital focuses on trends in the Permian, Eagle Ford, Haynesville, and Marcellus and Utica plays. The cost of producing oil and gas depends on the geological makeup of the reserve, the depth of the reserve, and the cost of transporting the raw crude to market. We can observe different costs in different regions depending on these factors. In this week’s post, we take a closer look at the Permian.
While large-scale upstream M&A has dominated industry headlines, the mineral and royalty space has quietly sustained deal momentum over the past year. From high-profile corporate mergers to strategic bolt-ons and capital recycling plays, activity in the Permian Basin remains robust. Publicly traded royalty platforms are leveraging both equity and debt to consolidate top-tier assets, signaling a maturing market where scale, structure, and selectivity are reshaping the investment landscape.
