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a day ago
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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
a day ago
- 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
a day ago
- 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
2 days ago
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Global Upstream M&A Drops 34% as U.S. Activity Slumps
Mergers and acquisitions in the global upstream oil and gas sector clocked in at just over $80 billion in the first half of 2025, good for a 34% year-over-year decline amid volatile oil prices and tariff concerns by the Trump administration. According to Rystad Energy, M&A was particularly weak in the first quarter, with deal value totalling just $28 billion compared to $66 billion in the first quarter of 2024. This was largely as a result of lackluster activity in North America, with the region's share of global deal value dropping to 51% in the first half of the year, down from 71% in the first quarter. The slowdown in the U.S. M&A can largely be attributed to a dearth of opportunities in the Permian Basin, long considered North America's M&A hotspot. Consequently, E&P companies are increasingly turning elsewhere as the Permian cools and asset values skyrocket: back in May, EOG Resources (NYSE:EOG) acquired Utica heavyweight Encino Energy for $5.6 billion; Diversified Energy (NYSE:DEC) bought Maverick Natural Resources for nearly $1.3 billion while Citadel paid $1.2 billion for Paloma Natural Gas. Canada has, however, continued on its hot M&A streak, with upstream M&A deal value hitting $11.9 billion in H1 2025--nearly equal to the country's annual average over the past five years. Leading the charge was Whitecap Resources (OTCPK:WCPRF) acquisition of Veren for $15 billion, including net debt, as well as CNRL's purchase of Shell Plc's(NYSE:SHEL) stake in the Athabasca Oil Sands Project. Further, Strathcona Resources (OTCPK:STHRF) divested all its Montney assets and proposed a takeover of MEG Energy (OTCPK:MEGEF) in a deal that will turn it into a pure-play heavy oil North America, International M&A activity increased 37% year-on-year to $39.5 billion with a strong recovery in the second quarter overcoming a weak start to the year after deal values plunged nearly 60% Y/Y. Major transactions included ADNOC subsidiary XRG's bid for Australia's Santos Ltd (OTCPK:STOSF), accounting for nearly half of the total international deal value. A consortium led by ADNOC subsidiary XRG has made a $18.7 billion non-binding indicative offer to acquire Santos. The offer, valued at $5.76 per share, involves a potential scheme of arrangement for all of Santos' issued shares. The consortium includes Abu Dhabi Development Holding Company (ADQ) and Carlyle. Santos has granted XRG a six-week exclusive due diligence period to assess the proposal. Meanwhile, Italy's National Oil Company (NOC), Eni S.p.A. (NYSE:E) sold its upstream assets in Africa to giant oil and commodity trader, Vitol, for $1.65 billion; Norway's DNO ASA (OTCPK:DTNOF) acquired Sval Energi for $1.6 billion while Spain's Repsol (OTCQX:REPYY) and UK's Nego Energy's UK merged their North Sea upstream businesses to form Neo Next Energy. That said, a rumored-and-denied merger between BP Plc (NYSE:BP) and Shell (NYSE:SHEL) would no doubt seek to steal the M&A limelight, with deal value likely to approach $80 billion. Recent reports have emerged that Shell was considering a takeover of BP, potentially creating a European energy giant. However, Shell has explicitly stated it is not actively considering an offer for BP and has not held any talks with them regarding a possible acquisition. Shell has made a statement under Rule 2.8 of the UK Takeover Code, meaning the company is restricted from making an offer for BP for at least six months, except in specific circumstances. Interestingly, dealmaking in the natural gas sector has been robust, with deal values surging 30% in the first quarter. As Rystad notes, Big Oil companies are currently optimizing their portfolios to manage risk more effectively, a trend that is driving M&A in the gas sector. To wit, back in March, Chevron Corp. (NYSE:CVX) sold a 70% stake in its East Texas gas assets to TG Natural Resources for $525 million. The deal includes $75 million in cash and a $450 million capital carry to fund Chevron's Haynesville development. This transaction is part of Chevron's plan to divest $10-15 billion of assets by 2028. TGNR will become the majority owner of the East Texas gas assets and Chevron will retain a 30% non-operated interest and an overriding royalty interest. Similarly, Equinor (NYSE:EQNR) acquired a non-operating stake in EQT Corp's (NYSE:EQT) Marcellus assets, helping the Norwegian energy giant to gain exposure to robust gas production with minimal operational risks. 'These non-operated joint ventures allow majors and international oil companies to focus on their core operational portfolios while maintaining exposure to US shale gas, which has a positive outlook due to upcoming liquefied natural gas (LNG) projects and rising energy demand from data centers. Retaining non-operated stakes also allows majors to secure feed gas for planned off-grid power plants focused on artificial intelligence (AI),' noted Atul Raina, Rystad Energy's Vice President, Upstream M&A Research. By Alex Kimani for Read this article on
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3 days ago
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What You Need to Know Ahead of EOG Resources' Earnings Release
Valued at a market cap of $64.2 billion, EOG Resources, Inc. (EOG) is a leading independent oil and gas exploration and production company. The Houston, Texas-based company develops, produces, and markets crude oil, natural gas liquids, and natural gas. It is scheduled to announce its fiscal Q2 earnings for 2025 after the market closes on Thursday, Aug. 7. Before this event, analysts project this energy company to report a profit of $2.18 per share, down 31% from $3.16 per share in the year-ago quarter. The company has surpassed Wall Street's bottom-line estimates in each of the last four quarters. Its earnings of $2.87 per share in the previous quarter outpaced the consensus estimates by 4.7%. More News from Barchart Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! For the full year, analysts expect EOG to report EPS of $9.81, down 15.6% from $11.62 in fiscal 2024. Nonetheless, its EPS is expected to grow by 11.9% year-over-year to $10.98 in fiscal 2026. Shares of EOG have declined 11% over the past 52 weeks, lagging behind both the S&P 500 Index's ($SPX) 13.6% uptick and the Energy Select Sector SPDR Fund's (XLE) 8% drop over the same time frame. On May 1, EOG Resources delivered mixed Q1 results, and its shares closed down marginally in the following trading session. The company's revenue declined 7.4% year-over-year to $5.7 billion, missing consensus estimates by 2.7%. Nonetheless, despite the fall in revenue, its adjusted EPS of $2.87 increased 1.8% from the same period last year, topping Wall Street expectations by 4.7%. Wall Street analysts are moderately optimistic about EOG's stock, with an overall "Moderate Buy" rating. Among 29 analysts covering the stock, 12 recommend "Strong Buy," two indicate "Moderate Buy,' and 15 suggest "Hold.' The mean price target for EOG is $139.03, implying an 18.1% premium from the current levels. On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on 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
