US oil ‘mini-majors’ emerge from shale patch deals, soaring energy prices

US oil ‘mini-majors’ emerge from shale patch deals, soaring energy prices

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HOUSTON- A group of oil and gas "mini-majors" are emerging among U.S. shale producers, built from aggressive dealmaking that industry players expect will accelerate on strong commodity prices and the retreat of Europeans from U.S. onshore production.

The players, including Devon Energy Corp, EQT Corp , Continental Resources, Pioneer Natural Resources and Diamondback Energy, are poised for another round of dealmaking, according to interviews with a dozen sources.

"The conditions are there for public companies, in particular large independents and mid-caps, to use dealmaking to reshape themselves and ensure they have adequate inventory to capitalize on this commodity price supercycle," said Pete Bowden, global head of energy and power at Jefferies.

Among potential targets are Colgate Energy Partners, controlled by Pearl Energy Investments and NGP, and Ameredev II, backed by EnCap Investments. Both were formed after their private equity owners put separate companies together to make them more attractive to the emerging mini-majors.

The trend echoes the late-1990s, when rapid combinations spawned global supermajors BP, Exxon Mobil Corp and Chevron Corp. Like then, this round of consolidation uses size to improve economies of scale. But this time, the mini-majors are bulking up largely in individual U.S. shale formations.

Pioneer Natural increased its holdings in the