Merger and acquisition (M&A) activity in the U.S. oil and gas industry is on track to match or surpass the record levels achieved last year. According to Rystad Energy, current dealmaking has reached $100 billion, with an additional $46 billion in potential transactions. Last year’s M&A total peaked at a historic $155 billion.
The data underscores continued high consolidation rates in the U.S. oil and gas sector. Enverus also forecasted a robust year for M&A activity, noting $30.2 billion in deals for the second quarter and increased consolidation across various shale plays beyond the Permian Basin.
Rystad Energy’s recent report highlights a shift in focus from the Permian Basin, which has historically dominated deals, to other regions such as the Eagle Ford and Uinta Basin. The Permian, while still significant, now represents 46% of all deals this year compared to 92% last year. The Bakken shale has also seen notable activity, accounting for 12% of the total deals, a significant increase from the previous year, while the Uinta Basin recently hosted a $2 billion acquisition of XCL Resources by SM Energy.
As Permian assets become scarce and prices rise, buyers are exploring other basins. Besides the Bakken, the Eagle Ford and Marcellus shales have each made substantial contributions, with shares of 13% and 14%, respectively. The high pace of dealmaking is expected to continue, with 12 deals over $1 billion already recorded this year, potentially surpassing last year’s total of 19 such deals.
Looking ahead, Rystad Energy’s new report suggests that future deal locations may increasingly consider emissions factors. Despite the ongoing energy transition, oil and gas are projected to remain dominant. The industry will face growing pressure to reduce its carbon footprint, leading to a focus on “premium energy basins” like the deepwater Gulf of Mexico, which offers significant carbon storage potential.
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