Upstream M&A descends to $12 billion in 3Q24

High asset prices and fewer targets hinder deals

CALGARY, AB, Oct. 16, 2024 /PRNewswire/ -- Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, is releasing its summary of 3Q24 upstream M&A activity. Following 12 months of heightened consolidation in oil and gas, the pace of deals significantly slowed in the third quarter of 2024 with $12 billion in announced deals, the lowest quarterly total since 1Q23.

"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," said Andrew Dittmar, principal analyst at EIR. "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."

The most notable shift in the just-completed quarter was the lack of consolidation between publicly traded E&Ps, the first time that has happened in a quarter since 2022. "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," said Dittmar.

Sales by private equity companies are also likely to continue to feature prominently in upstream deal activity. The largest transaction of 3Q24 was Devon Energy's acquisition of EnCap-funded Grayson Mill Energy in the Williston Basin for $5 billion.

While private equity has featured most prominently in deal markets as a seller of shale inventory to public companies, these firms are still raising new capital and putting it to work. Private firms are broadening the search to areas without competition for deals from public companies. "There is still a significant amount of oil and gas to develop outside the main shale plays focused on by bigger public companies," Dittmar said.

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About Enverus Intelligence Research
Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers, and more than 40,000 suppliers. Learn more at Enverus.com.

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