Permian, Magnolia could be acquisition targets in energy space, Truist says

Truist notes the energy space has experienced a wave of M&A in recent months as operators continue to find ways to extend inventory while simultaneously boosting shareholder returns. The firm anticipates deal flow to remain active in the coming months/quarters given there are numerous E&Ps with relatively limited tier one inventory; there remains numerous smid cap private and public companies that lack sufficient scale; lack of future new major discoveries places emphasis on operational efficiencies. In addition to several potential private sellers, Truist believes several public E&Ps such as Permian Resources (PR), Chord Energy (CHRD), Magnolia Oil & Gas (MGY), Callon Petroleum (CPE), Gulfport Energy (GPOR), Southwestern Energy (SWN) among others could be acquisition targets. The firm further notes that the low valuations make many E&Ps attractive acquisition targets as larger operators could pay a premium and still show immediate accretion. Some of Truist’s covered companies currently with the most attractive values, the firm says, include Civitas Resources (CIVI), Callon Petroleum, Crescent Energy (CRGY), Northern Oil and Gas (NOG), Permian Resources, SilverBow Resources (SBOW), Gulfport Energy, and Riley Exploration (REPX), among others.