U.S. oil and gas mergers continue at furious pace in 2Q
U.S. oil and gas patch deals continued to run hot in 2Q, topping $30 B with big dollar tie-ups pushing values higher, according to data released on Tuesday by energy researcher Enverus.
Blockbuster mergers, such as ConocoPhillips' $22.5-B offer for Marathon Oil, remain a mainstay even as U.S. lawmakers call on regulators to “pump the brakes” on merger approvals.
The latest round of deals kicked off last autumn with ExxonMobil's $60-B offer for Pioneer Natural and has spread through the U.S. energy industry, moving across Texas and North Dakota oil and gas producers to energy pipeline operators.
There were 18 oil and gas production tie-ups with disclosed prices totaling $30.29 B, up from 25 deals valued at $24.4 B in the same quarter a year ago, said Andrew Dittmar, Enverus' head of M&A research.
"Pressure built on companies like ConocoPhillips and Devon Energy, that have previously stayed out of the market, to keep pace with peers and grow in scale," said Dittmar.
The value of deals, however, slipped from a record $51 B in 1Q, according to Enverus data.
Conoco's proposed acquisition of Marathon Oil represented most of last quarter's deal total. Devon Energy this month has reinforced the pace with its $5-B bid for shale oil producer Grayson Mills.
The average price per undeveloped drilling location in this year's oil production combinations climbed to $3.2 MM, from an average of $1.9 MM in 2023, Enverus data showed.
Oil and gas deals priced at less than $1 B have been squeezed by a lack of capital and shifting investment goals by private-equity investors, according to M&A advisory firm Petrie Partners.
Among the 2Q deals: SM Energy agreed to buy XCL Resources for $2.55 B, Crescent Energy bid $2.1 B for SilverBow Resources, and Matador Resources offered $1.9 B for Ameredev II.
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