US energy deals drop in Q3 to $12 billion after year-long frenzy

Permian Resources

16/10/2024 14:30

HOUSTON, Oct 16 (Reuters) - U.S. oil mergers slowed
sharply last quarter after a year-long consolidation wave
emptied pocketbooks and left fewer companies on offer in the top
U.S. shale field, analytics firm Enverus said on Wednesday.
    There were $12 billion worth of deals disclosed in the
quarter ended Sept. 30, the lowest total in six quarters, said
Enverus Intelligence Research principal analyst Andrew
Dittmar.  
    "Upstream M&A was bound to drop" after 2023's record $192
billion in deals largely in the Permian basin of West Texas and
New Mexico, the largest U.S. shale field. Those mega deals have
acquirers busy running portfolio reviews to weed out unwanted
assets, he added.   
Some of the biggest buyers have become sellers as they prune
holdings, he said, citing Occidental Petroleum's  OXY.N  $818
million sale of properties to Permian Resources  PR.N  and APA
Corp  APA.O  divesting older properties to an undisclosed
buyer.  
The two biggest deals in the quarter were outside the Permian
basin in secondary shale fields, with Devon Energy  DVN.N 
adding to its North Dakota holdings with a $5 billion deal for
Grayson Mill Energy assets. 
The second largest deal, Quantum Capital Group's $1.8 billion
deal for Caerus Oil & Gas properties, was for properties in
northwestern Colorado and Utah.
    "There is still a significant amount of oil and gas to
develop outside the main shale plays," said Enverus' Dittmar.
"We're going to see more interest in these types of assets from
private companies and small public companies."
The third quarter's deal value was the smallest quarterly total
this year, and less than half the second quarter's $30 billion
in oil and gas deals. 
Some of the announced combinations have been delayed, either by
antitrust regulator the Federal Trade Commission or a contract
arbitration challenge. 

(Reporting by Gary McWilliams
Editing by Chris Reese)
((mailto:Gary.McWilliams@thomsonreuters.com; +1 469-691-7668;))