Calgary-based Enverus Intelligence Research said Wednesday the pace of M&A (mergers and acquisitions) upstream activity in third quarter slowed significantly “following 12 months of heightened consolidation in oil and gas.” The $12 billion in announced deals in 2024Q3 was the lowest quarterly total since the first quarter of 2023. Enverus attributed the decline “to a pause in public company consolidation as well as fewer deals to be had in the prolific Permian Basin.”
Andrew Dittman, analyst, said, “Upstream M&A was bound to drop after the unprecedented lift of corporate mergers and private equity exits since 2023. Those deals raised asset prices and cut the number of potential targets. An additional factor could have been increased volatility in crude prices during the third quarter. Any time commodities get more volatile, oil and gas deals are harder to negotiate.”
Three of the top five deals in 3Q included Permian assets, including Vital Energy’s $1.1 billion acquisition of Point Energy Partners in Delaware Basin. Also, APA Corp. divested property in Permian and other regions to a private buyer for $950 million, and Permian Resources acquired $818 million of property from Occidental Petroleum.
Dittman added, “While corporate M&A has slowed, the industry is not done consolidating. If you look out a few years from now, there are going to be fewer companies operating in the main U.S. shale plays.”