US upstream oil & gas deals hit a two-year high during Q1 2026

Enverus, a firm that provides analytics, reported on Wednesday that the amount of deals in the U.S. oil and gas sector upstream jumped to $38 billion during the first quarter this year. This was the highest quarterly figure in two years. Last week, Devon Shale Producers and Coterra, a smaller competitor to Devon, closed their merger after first announcing the plans in February. This deal, valued at $25 billion, took up the majority of Q1's dealmaking.

Both companies are active in multiple shale formations. They can be found in the Delaware portion in Texas' Permian Basin, as well as in New Mexico's Anadarko Basin and Oklahoma’s Anadarko Basin.

Dealmaking slowed in March due to a spike in crude price volatility following the U.S. and Israeli strikes on Iran that triggered a wider Middle East conflict - and disrupted shipping along the Strait of Hormuz.

Since the beginning of the war, on February 28, Brent crude futures for the global benchmark have fluctuated from a low price of $77.74 per barrel to a maximum of $118.35.

Enverus stated that higher oil prices would likely lead to a rebound of dealmaking, as they will allow more private exploration companies and production companies pursue sales while supporting continued consolidation.

The market has entered a temporary hold pattern due to volatility, but the argument for higher oil prices for longer is growing stronger, and this creates the conditions for an M&A recovery, according to Andrew Dittmar.

He added that "we are likely to be heading into another tsunami of consolidation" as the higher oil prices will supercharge both private companies' appetite for deal-making and public E&P appetite, and also corporate consolidations and private asset sales. Mitsubishi purchased Aethon Energy, the largest deal ever for the Japanese company as it seeks a stronger gas supply chain. (Reporting and editing by Sanjeev Mikleni in Houston)

(source: Reuters)