Upstream Oil and Gas Mergers and Acquisitions Reach $105 Billion in 2024
The upstream oil and gas industry in the United States witnessed a significant surge in dealmaking activity in 2024, with a total value of $105 billion. Although this figure represents the third-highest annual total ever, it still falls short of the remarkable $192 billion achieved in 2023.
Permian Basin Remains a Hotspot for Acquisitions
The Permian Basin continues to be the most sought-after acquisition target, but buyers are now exploring opportunities beyond this region as the availability of desirable assets dwindles. According to Enverus’ report, operators are likely to venture into unexpected regions and plays in 2025, leading to some surprising developments.
Alternative Shale Plays Gain Traction
As the Permian Basin’s opportunities dry up, mature shale plays like the Williston Basin in North Dakota and Eagle Ford in south Texas are gaining attention. These developed assets offer an opportunity for refracking, which can provide a quick increase in output with relatively smaller investments.
Deal Value Slows Down in Q4 2024
The value of deals slowed down towards the end of 2024, with only $9.6 billion booked in the last quarter. This decline can be attributed to the scarcity of M&A targets and larger E&Ps focusing on integrating their previous deals before returning to the market.
Consolidation on the Horizon
The lack of growth opportunities may eventually push smaller operators to sell, leading to further consolidation in the industry. The remaining acquisition opportunities are largely smaller, higher up the cost curve, or both, making it essential for operators to reassess their strategies.
Notable Deals of Q4 2024
Coterra Energy’s purchase of Avant Natural Resources and Franklin Mountain Energy in the Delaware Basin for a combined $3.95 billion was the largest deal of the fourth quarter of 2024. FourPoint Energy’s purchase of Ovintiv’s Uinta assets in Utah for $2 billion marked one of the largest recent private acquisitions.
Gas-Focused M&A Sees Significant Growth
The value of gas-focused M&A increased fourfold in 2024 compared to 2023, rising above $20 billion for the first time since 2016. This trend is expected to continue, driven by the growing demand for liquefied natural gas, data center build-out, and power demand.
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