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Associated Press
23-07-2025
- Business
- Associated Press
Upstream M&A hits the brakes, slowing to $14 billion
Private capital, international buyers could help deals gain traction in the second half of 2025 CALGARY, AB, July 23, 2025 /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 2Q2025 upstream M&A activity and outlook for the rest of the year. Upstream M&A decelerated in the second quarter of 2025, with value falling 21% quarter-over-quarter to $13.5 billion. That is the second lowest quarterly deal value since the start of 2024 and placed 1H25 M&A value at $30.5 billion, a 60% drop compared to the first half of 2024. 'Volatility in commodity and equity markets raised a major yellow flag for M&A, slowing the pace of dealmaking,' commented Andrew Dittmar, principal analyst at EIR. 'That added an additional barrier to a market that was already challenged by the lack of remaining attractive opportunities for public E&Ps, especially in the Perman Basin. The engine of M&A over the last few years has sputtered and stalled.' In contrast to public operators, private capital has more flexibility in the types of deals and assets pursued as well as not needing the same scale as public companies. Some are returning to the Permian Basin, picking up small assets or focusing on extensional areas not yet consolidated by large operators. However, the biggest opportunities are likely to be in areas off the radar of public companies. The SCOOP | STACK in Oklahoma is one such region where public companies are more likely to be sellers than buyers. Asia-based companies with LNG import commitments are an emerging force for buying Gulf Coast area gas assets. The combination of accelerating international interest in gas linked to Gulf Coast LNG plus emerging datacenter demand in Appalachia has the potential to rev up gas M&A. One type of deal that has been notably absent this year is public company consolidation, a key component of the market in 2023 and 2024. 'These types of deals should be easier to negotiate in a volatile environment given they are generally stock-for-stock swaps that limit commodity price risk,' said Dittmar. View Enverus' Top 5 deals and full announcement including extended commentary 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 View original content to download multimedia: SOURCE Enverus
Yahoo
23-07-2025
- Business
- Yahoo
Dealmaking in US upstream oil and gas tumbles as volatility rattles investors
By Georgina McCartney HOUSTON (Reuters) -Volatility across energy and equity markets spooked investors in the second quarter, slowing the pace of mergers and acquisitions in the U.S. upstream oil and gas sector, analytics firm Enverus said on Wednesday. The slump in dealmaking follows a series of blockbuster takeovers by oil and gas majors in recent years, which culminated in a record $192 billion worth of deals done in 2023. There were $13.5 billion worth of deals disclosed in the quarter ended June 30, marking a 21% drop quarter-over-quarter, Enverus said. The first half of 2025 saw a total of $30.5 billion change hands, which is a 60% decline compared with the same period of 2024. 'Volatility in commodity and equity markets raised a major yellow flag for M&A, slowing the pace of dealmaking,' said Andrew Dittmar, principal analyst at Enverus Intelligence Research. Oil prices fell to multi-year lows last quarter after U.S. President Donald Trump unveiled an extensive list of trade tariffs in April, stoking concerns of a recession and a drop in fuel demand, and the Organization of the Petroleum Exporting Countries announced plans to unwind deep output cuts. Prices also jumped as conflict in the Middle East inflated traders' risk premium. During the second quarter, U.S. crude futures hit a low of $57.13 a barrel on May 5, before swinging to a high of $75.14 on June 18, according to data from LSEG. Houston-based exploration and production company EOG Resources bought Encino Acquisition Partners for $5.6 billion in May, taking the lion's share of deals done in the second quarter, according to Enverus. Viper Energy followed with its purchase of Sitio Royalties for $4.1 billion in June. Those two transactions accounted for over 75% of second-quarter deal value, Enverus said. "The engine of M&A over the last few years has sputtered and stalled, given there are just a few remaining targets," Dittmar said. Companies will eventually need to explore opportunities to buy assets abroad, in Canada or further afield in areas like Argentina's Vaca Muerta, he added. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
23-07-2025
- Business
- Reuters
Dealmaking in US upstream oil and gas tumbles as volatility rattles investors
HOUSTON, July 23 (Reuters) - Volatility across energy and equity markets spooked investors in the second quarter, slowing the pace of mergers and acquisitions in the U.S. upstream oil and gas sector, analytics firm Enverus said on Wednesday. The slump in dealmaking follows a series of blockbuster takeovers by oil and gas majors in recent years, which culminated in a record $192 billion worth of deals done in 2023. There were $13.5 billion worth of deals disclosed in the quarter ended June 30, marking a 21% drop quarter-over-quarter, Enverus said. The first half of 2025 saw a total of $30.5 billion change hands, which is a 60% decline compared with the same period of 2024. 'Volatility in commodity and equity markets raised a major yellow flag for M&A, slowing the pace of dealmaking,' said Andrew Dittmar, principal analyst at Enverus Intelligence Research. Oil prices fell to multi-year lows last quarter after U.S. President Donald Trump unveiled an extensive list of trade tariffs in April, stoking concerns of a recession and a drop in fuel demand, and the Organization of the Petroleum Exporting Countries announced plans to unwind deep output cuts. Prices also jumped as conflict in the Middle East inflated traders' risk premium. During the second quarter, U.S. crude futures hit a low of $57.13 a barrel on May 5, before swinging to a high of $75.14 on June 18, according to data from LSEG. Houston-based exploration and production company EOG Resources (EOG.N), opens new tab bought Encino Acquisition Partners for $5.6 billion in May, taking the lion's share of deals done in the second quarter, according to Enverus. Viper Energy (VNOM.O), opens new tab followed with its purchase of Sitio Royalties (STR.N), opens new tab for $4.1 billion in June. Those two transactions accounted for over 75% of second-quarter deal value, Enverus said. "The engine of M&A over the last few years has sputtered and stalled, given there are just a few remaining targets," Dittmar said. Companies will eventually need to explore opportunities to buy assets abroad, in Canada or further afield in areas like Argentina's Vaca Muerta, he added.
Yahoo
23-07-2025
- Business
- Yahoo
Dealmaking in US upstream oil and gas tumbles as volatility rattles investors
By Georgina McCartney HOUSTON (Reuters) -Volatility across energy and equity markets spooked investors in the second quarter, slowing the pace of mergers and acquisitions in the U.S. upstream oil and gas sector, analytics firm Enverus said on Wednesday. The slump in dealmaking follows a series of blockbuster takeovers by oil and gas majors in recent years, which culminated in a record $192 billion worth of deals done in 2023. There were $13.5 billion worth of deals disclosed in the quarter ended June 30, marking a 21% drop quarter-over-quarter, Enverus said. The first half of 2025 saw a total of $30.5 billion change hands, which is a 60% decline compared with the same period of 2024. 'Volatility in commodity and equity markets raised a major yellow flag for M&A, slowing the pace of dealmaking,' said Andrew Dittmar, principal analyst at Enverus Intelligence Research. Oil prices fell to multi-year lows last quarter after U.S. President Donald Trump unveiled an extensive list of trade tariffs in April, stoking concerns of a recession and a drop in fuel demand, and the Organization of the Petroleum Exporting Countries announced plans to unwind deep output cuts. Prices also jumped as conflict in the Middle East inflated traders' risk premium. During the second quarter, U.S. crude futures hit a low of $57.13 a barrel on May 5, before swinging to a high of $75.14 on June 18, according to data from LSEG. Houston-based exploration and production company EOG Resources bought Encino Acquisition Partners for $5.6 billion in May, taking the lion's share of deals done in the second quarter, according to Enverus. Viper Energy followed with its purchase of Sitio Royalties for $4.1 billion in June. Those two transactions accounted for over 75% of second-quarter deal value, Enverus said. "The engine of M&A over the last few years has sputtered and stalled, given there are just a few remaining targets," Dittmar said. Companies will eventually need to explore opportunities to buy assets abroad, in Canada or further afield in areas like Argentina's Vaca Muerta, he added. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-04-2025
- Business
- Yahoo
U.S. Shale M&A Hits the Brakes as Oil Slides and Tariffs Bite
Mergers and acquisitions in the U.S. shale industry got off to a strong start this year. Oil was trading at pretty reasonable prices—unless you're OPEC—there was a pro-oil president in the White House, and the outlook was bright. For a while. Then, prices took a dive, markets panicked about tariffs, and everyone started predicting economic catastrophe. The outlook is no longer so bright. The first quarter of 2025 saw shale oil and gas deals worth a total of $17 billion, Enverus reported this week. This made the quarter the second-best after the first quarter of 2018, the analytics firm said, noting, however, that about half of that total deal value came from two deals involving Diamondback Energy worth over $4 billion each. One of the deals was an acquisition of Permian-focused producer Double Eagle IV, which cost Diamondback some $4.08 billion, and the other was a dropdown of mineral and royalty rights to subsidiary Viper Energy, worth $4.26 billion. Outside Diamondback's activity, however, deals began to get sparse as the M&A wave that rose in late 2023 began to ebb away with asking prices too high and the assets on offer of lower quality. 'Upstream deal markets are heading into the most challenging conditions we have seen since the first half of 2020. High asset prices and limited opportunities are colliding with weakening crude,' Enverus' principal analyst Andrew Dittmar said. 'Potential sellers are acutely aware of the scarcity of high-quality shale inventory, creating a reluctance to unload their assets at a discount. Buyers, on the other hand, were already stretched by M&A valuations and can't afford to continue to pay recent prices now that oil prices are lower. The standoff between those two groups around fair asset pricing is set to sink M&A activity.' In fairness, the deal wave could not continue forever, not after two robust years. In 2023, M&A activity in the U.S. oil and gas space surged by 57% from the previous year. The total value of deals that closed that year hit an all-time high of $155 billion, helped by a couple of megadeals of over $50 billion. The next year was robust, too, with close to $150 billion in deals. Last year, however, the focus of dealmakers began to shift from the Permian to other parts of the shale patch in what may have well been an early sign of the pending slowdown. It could be argued that this slowdown would have happened even without the price rout and the tariff war. The supply of high-quality, low-cost acreage was simply going to run out sooner or later—and with the level of activity in 2023 and 2024, that was bound to be sooner. Trends in oil prices and Trump trade policies simply sped up a process that was already underway. Indeed, Enverus noted in its M&A report that lower oil prices discourage dealmaking in the industry. The firm said that 'Going back to the start of 2014, oil prices have fallen by more than 5% quarter-over-quarter 17 times. In 11 of the quarters with materially lower crude prices, deal activity fell compared to the prior three months with an average decline in transacted deal value of 30%.' In other words, what's happening in the shale patch is completely normal, and there is even bonus good news: companies are better positioned to withstand the price rout, according to Enverus, thanks to their new priority of capital discipline and debt level control. 'Companies have kept debt levels in check, been conservative about growing production and made judicious use of hedges,' the analytics provider said. It cautioned, however, that this will only spare sector players pain if the rout does not last too long. If the tariff war and the low oil prices extend into 2026, they will start causing pain. Somewhat ironically, such a hypothetical development would revive dealmaking as companies seek to consolidate to survive as they tend to do in times of trouble. 'If oil prices struggle into 2026, public E&Ps are likely to start taking more drastic actions including cutting capital spending, selling assets or even considering mergers with another company,' Enverus' Dittmar commented. The jury's still out on how long the tariff war or the oil price depression will continue. For now, the situation with tariffs on China does not look particularly promising, as China said it would only engage in negotiations after the U.S. lifts the tariffs already imposed on its exports. The U.S. does not seem to be willing to do that for now, which has resulted in a sort of tariff stalemate. Meanwhile, oil prices remain rather depressed, although they have recouped some of the losses suffered earlier this month amid the sharp revisions in demand outlooks because of the tariffs. This week, the benchmarks are set for another loss after Reuters reported that OPEC+ may be considering another solid production ramp-up in June as it continues to look for a way to make quota laggards pay for overproducing. For now, the environment remains discouraging for a rebound in M&A activity. By Irina Slav for More Top Reads From this article on Sign in to access your portfolio
