“He’s Not Done Yet!” - Oil Company Valuations Rise As Scale And Scarcity Drive Consolidation

BusinessEnergy“He’s Not Done Yet!” - Oil Company Valuations Rise As Scale And Scarcity Drive ConsolidationByBryce Erickson,Contributor.Forbes contributors publish independent expert analyses and insights. Bryce Erickson covers valuation and economics in the energy space.Follow AuthorApr 24, 2026, 11:35am EDT--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI. Learn more. ShutterstockThe Iran conflict has certainly changed short term oil prices, amongst a whole lot of other things, in the past two months. Before that, however, oil prices did not send a particularly strong signal heading into 2026. Futures curves suggested relatively flat pricing, and operator expectations remained anchored in the high-$50s to low-$60s range. On the surface, that would not typically support a valuation expansion for oil-focused exploration and production companies.Yet equity values for independent, oil-weighted E&Ps, especially those focused in the Permian and Eagle Ford, show increases that were not visible at the end of 2025. Increasingly, valuations are being driven less by near-term commodity prices and more by structural factors: inventory depth, capital discipline, and the growing importance of scale. The recently announced Devon Energy and Coterra Energy merger provides a clear example of that trend.I noticed this shortly before the merger announcement when stock prices rose subsequent to a November article I wrote. The same group of companies: Diamondback Energy (FANG), Permian Resources (PR), Devon Energy (DVN), and APA Corporation (APA) (minus Vital which merged with Crescent in December) were up significantly since then:Permian Independents November 25 - April 26Mercer CapitalEnterprise values have risen around $30 billion for these four companies since early November. After observing this, talking to clients and industry friends, and reading up on some recent developments, the key takeaway was that valuations are n...