U.S. Shale Drives Global Upstream M&A Value To Highest since 2017

The value of global upstream mergers and acquisitions has already hit this quarter the highest first-quarter level since 2017, driven by frenzied consolidation in the U.S. shale patch, analysts have told Reuters.

In January and February, as much as $58 billion worth of upstream M&As have been announced globally, of which the U.S. deals represent more than 80% of total value, according to data from Rystad Energy cited by Reuters.

The January-February tally of global upstream deal value, with one month to go until the end of the quarter, is already the highest first-quarter deal value since 2017. It is also more than double the value of the mergers and acquisitions announced in the first quarter of 2023.    

“With another estimated $55 billion worth of assets up for sale in the U.S. shale, we expect this shale domination in overall M&A activity to continue,” Palash Ravi, Rystad Energy senior M&A analyst, told Reuters.

The ongoing consolidation in the U.S. shale industry has seen deals announced nearly every week since the beginning of 2024. Some of the biggest include Diamondback Energy agreeing earlier this month to buy Endeavor Energy Resources in a $26-billion transaction.

Last week, Chord Energy and Enerplus agreed to combine in an approximately $11 billion stock and cash transaction, which will create a premier Williston basin-focused exploration and production company.  

In January, APA Corporation said it would buy Permian oil and gas producer Callon Petroleum Company in an all-stock transaction valued at around $4.5 billion, including Callon’s net debt.

The latest merger frenzy in the U.S. oil and gas industry began in earnest in the fourth quarter of 2023, when ExxonMobil, Chevron, and Occidental were some of the big names that announced major acquisitions.

Industry executives and analysts expect the consolidation drive in the oil and gas sector to continue amid high stock values and the desire of many firms to get their hands on more inventory for production in the top shale basin, the Permian.

By Charles Kennedy for Oilprice.com

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