Calgary-based Enverus Intelligence Research said recently that upstream M&A activity (mergers and acquisitions) marked its third straight quarter of heightened value with more than $30 billion transacted. That brings year-to-date activity as of July 30 to nearly $90 billion and nearly $250 billion transacted in the last 12 months.
Andrew Dittmar, principal analyst, said, “M&A momentum carried into the second quarter as pressure built on companies like ConocoPhillips, Devon Energy and SM Energy that had previously stayed out of the market to keep pace with peers and grow in scale… There is still a perception that successfully navigating the maturing phase of shale requires building resource base with M&A.”
Second quarter transactions were highlighted by ConocoPhillips’ acquisition of Marathon Oil for $22.5 billion across multiple basins, including Permian. Also among the top five deals, Matador Resources acquired Ameredev II for $1.9 billion in Delaware Basin.
Dittmar added, “The increasing cost of buying drilling inventory, particularly in Permian, has been the main story in upstream M&A throughout 2024. With the highest quality inventory selling at premium pricing, there has been a scramble for middle-tier inventory that provides strong returns even if it isn’t as economic as Permian core assets.”