Oil and gas upstream M&A deal value hits highest Q1 levels since 2017

Deals worth more than $55 billion have been announced in the first two months of 2024, according to analytics firm Enverus, as publicly traded companies take advantage of their high share price to gobble up smaller firms.

Some of the major deals include Diamondback Energy’s $26 billion offer to acquire Endeavor Energy Partners earlier this month and APA Corp agreeing to buy Callon Petroleum for $4.5 billion in January.

The total value of deals in January and February has already hit the highest level since the first quarter of 2017 when $68 billion worth of deals were announced, and is also more than double that announced in the first quarter of 2023.

Deals involving US shale firms represented more than 80% of the total value, Enverus said.

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

An uptick in international M&A activity has also helped boost overall deal value.

European majors have driven much of the activity, representing 66% of the overall international M&A deal value so far in 2024, as per Rystad Energy data.

Industry experts also expect some consolidation in the US shale gas sector in 2024, following a period of muted activity due to a drop in Henry Hub prices.

“Future gas M&A is likely to be driven by outside buyers that lack exposure to US shale gas assets or cases where there are large in-basin synergies to capture,” said Andrew Dittmar, a senior vice president at Enverus.