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HomeNewsQuarterly Record Reached in US Oil and Gas M&A Following Blockbuster 2023

Quarterly Record Reached in US Oil and Gas M&A Following Blockbuster 2023

In the first quarter of this year, the United States saw a massive $51 billion in oil and gas deals, according to Enverus, a big data player in the industry. This surge isn’t shocking given last year’s trend of companies teaming up, especially in the Permian Basin spanning West Texas and New Mexico.

Why the Permian? Well, it’s where the action’s at. Producing there costs around $64 a barrel, and with oil prices hovering around $77 a barrel last quarter and hitting nearly $83 per barrel this week, it’s a lucrative spot.

Andrew Dittmar from Enverus Intelligence Research nails it when he says, “Most of the high-quality U.S. drilling prospects are in the Permian.” No wonder it’s driving all this deal-making madness.

Speaking of deals, the biggies last quarter were Diamondback Energy throwing down a hefty $26 billion to snag Endeavor Energy Partners. Apache Corp also splashed $4.5 billion for Callon Petroleum, and Chesapeake Energy went big with a $7.4 billion grab for Southwestern Energy.

But not every deal is smooth sailing. Chesapeake’s big move and last year’s megadeals by Exxon Mobil and Chevron are stuck in the regulatory mud. Seems like the government wants to ensure there’s fair competition in the Permian and Haynesville shale fields.

Looking ahead, Dittmar thinks the deal frenzy might cool off a bit. With oil prices strong, companies might think twice about selling off their drilling assets. Despite all the wheeling and dealing, there’s still a feeling of scarcity in the air. Exploration and production companies are holding onto their assets tighter than ever, seeing them as valuable treasures rather than things to toss aside.

So, while the oil and gas drama is far from over, it’s clear that the industry is in for some interesting times ahead.