Coterra Energy is set to expand its footprint in the oil-rich Permian Basin, announcing on Wednesday that it will acquire assets from privately held Avant Natural Resources and Franklin Mountain Energy for a combined $3.95 billion. The deal includes two separate transactions, aimed at deepening Coterra’s presence in one of the most prolific oil-producing regions in the United States.
The Permian Basin, stretching across parts of Texas and New Mexico, has become a hotspot for U.S. energy companies, thanks to its vast undeveloped reserves, impressive productivity, and strong infrastructure. As Coterra makes this move, it’s clear that the company is following a broader trend in the industry: tapping into the Permian’s massive potential to boost inventory and strengthen long-term growth.
According to Coterra, these acquisitions will significantly increase its foothold in the region. Specifically, the company’s net locations in New Mexico will grow by roughly 75%, while its overall holdings in the Permian will see a 25% boost. Once the transactions are complete, the acquired assets are expected to add between 60,000 to 70,000 barrels of oil equivalent per day (boepd) to Coterra’s production by 2025. The additional output should translate into “significant oil volumes” as the company aims to capitalize on its increased capacity.
Speaking to analysts, CEO Tom Jorden emphasized that the decision to make these acquisitions wasn’t driven by any need to fill gaps in current inventory or production. Instead, he framed it as a strategic expansion. “This isn’t about plugging a hole,” Jorden said, reiterating that the company has plenty of flexibility in terms of future investments. Despite reallocating capital to more oil-heavy projects in response to the recent dip in natural gas prices, Jorden was clear that Coterra remains open to pursuing opportunities in natural gas as well.
The funding for the acquisitions will come in the form of $2.95 billion in cash, along with 40.9 million shares of Coterra’s common stock—valued at approximately $1 billion—to be issued to one of the sellers. If everything goes according to plan, Coterra expects these transactions to close in the first quarter of 2025, adding to a growing list of recent deals in the U.S. oil and gas sector.
Overall, this move underscores the continued appeal of the Permian Basin for energy producers. Companies like Coterra are betting big on the basin’s potential to help them navigate fluctuating commodity prices, secure reliable production levels, and position themselves for the future of U.S. energy development.
