Enverus Intelligence Research said last week the deal value of U.S. merger and acquisition activity in Q1 was down about 20 percent from the Q1 average since 2016 and was an outlier in deal targets and types for upstream transactions. Andrew Dittmar, director at Enverus, said May 2, “Rather than public E&Ps focusing on buying undeveloped inventory in the Permian Basin from private companies, most of the deals targeted mature assets in Eagle Ford and included more public-to-private transactions.”
Leader in deal size was the acquisition by Calgary-based Baytex Energy of Eagle Ford pure-play Ranger Oil reported at $2.5 billion, including debt. Matador Resources was among the E&Ps expanding in the Permian with its $1.6 billion acquisition of EnCap’s Advance Energy Partners in Delaware Basin.
“Most public companies are in need of inventory,” Dittmar added, “and the land held by private E&Ps is where they can find it. However, adding these locations comes at an increasing cost… The scramble for dwindling inventory is on, and oil prices are in a good place for M&A where both buyers and sellers feel comfortable transacting.”