US upstream oil and natural gas dealmaking falls for the third consecutive quarter amid low prices
Enverus, an analytics firm, said that the persistently low oil price kept buyers away from the sector during the third quarter.
According to Enverus's latest report, merger and acquisition activity is down for the third consecutive quarter. This marks a dramatic departure from the blockbuster deals of recent years, such as Exxon Mobil's $60 billion deal with Pioneer Natural Resources, which will close in 2023, and Chevron’s $53 billion purchase by rival Hess this year.
Enverus reports that the total value of deals in 2023 was a record-breaking $192 billion. This figure dropped to just $105 billion by 2024.
U.S. crude oil futures were around $65 per barrel on average during the period of July to September. This is just the price that many producers claim they need for a profitable drill but it was $10 less than the same quarter in 2013. Deals totaling $9.7 billion were disclosed in the quarter ended September 30, Enverus said, marking a 28% drop quarter-over-quarter.
Andrew Dittmar is the principal analyst of Enverus Intelligence.
He added that "most remaining shale M&A deals need to be priced higher for public companies to pay for undeveloped locations."
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Crescent Energy
Enverus says that in August it bought Vital Energy, a smaller competitor, in a $3 billion all-stock deal. This was the largest deal in the third quarter.
This deal helped Crescent gain a foothold in Texas and New Mexico's Permian Shale Basin.
NATURAL GAS EMERGES IN BRIGHT SPOT
Natural gas was a bright spot during the third quarter. This was due to the rising demand for LNG exports, and data centers that are energy hungry.
Stone Ridge Holdings, a privately owned company, made the second largest transaction in the quarter with its $1.3billion purchase of Oklahoma energy assets by a U.S. producer.
ConocoPhillips
Dittmar said that the increased asset prices in Haynesville are being driven by Asian buyers looking for LNG-linked exposure.
According to LSEG data, the average price of U.S. Natural Gas at the Henry Hub Benchmark in Louisiana was $3 per million British Thermal Units, compared to $2.23 for the same period in 2024.
Reports indicate that Asian companies are increasing their investments in U.S. Gas assets, as American LNG export capability grows. Japan's JERA is in advanced discussions to purchase production assets worth $1.7 billion and Taiwan's CPC has begun early talks to buy shale-gas holdings. (Reporting and editing by Liz Hampton, Marguerita Choy, and Georgina McCartney from Houston)
(source: Reuters)
