Mergers and acquisitions in the U.S. oil and gas industry increased by 57% last year, as companies in the U.S. also increased their CAPEX.
By Irina Slav for Oilprice.com| Mergers and acquisitions in the U.S. oil and gas industry went up by 57% last year, a report by Ernst & Young found.
The increased consolidation activity followed record profits and intensified competition for limited untapped resources.
According to the report, the value of M&A deals last year reached $49.2 billion, up from $31.4 billion the previous year. The number was driven higher by several so-called megadeals featuring Big Oil majors Exxon and Chevron.
Exxon last year struck a deal to acquire Pioneer Natural Resources for some $60 billion, while Chevron agreed to take over Hess Corp. for some $53 billion. However, that deal has stalled due to Exxon’s opposition to focusing on Hess interests in Guyana’s Stabroek Block.
According to EY, dealmaking will remain robust this year and in 2025, with spending on mergers and acquisitions rising further.
“We started to see a focus in 2023 on consolidating the operators’ positions,” EY strategy and transactions group partner Bruce On told Reuters in an interview.
In addition to consolidation, oil and gas companies in the U.S. also increased spending on new exploration and production: the total for 2023 stood at $93.1 billion, up 28% from 2022.
Earlier this month, Enverus also forecast another strong year for mergers and acquisitions in the U.S. oil and gas space. The company reported $30.2 billion worth of new deals announced during the year’s second quarter alone and the third quarter of the year also got off to a strong start with the $5-billion acquisition of Grayson Mills by Devon Energy—a deal in the Bakken play—and the $1.1-billion acquisition of Point Energy Partners by Vital Energy and Northern Oil & Gas.
Enverus also reported that 12 deals with a size of $1 billion or more have been made since the start of the year, suggesting that the total for the year could exceed last year’s 19 deals with a billion dollars or more.
By Irina Slav for Oilprice.com
