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US oil and gas mergers continue at furious pace in Q2, says Enverus
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US oil and gas mergers continue at furious pace in Q2, says Enverus
Jul 30, 2024 6:51 AM

HOUSTON (Reuters) - U.S. oil and gas patch deals continued to run hot in the second quarter, topping $30 billion with big dollar tie-ups pushing values higher, according to data released on Tuesday by energy researcher Enverus.

Blockbuster mergers, such as ConocoPhillips' ( COP ) $22.5 billion offer for Marathon Oil ( MRO ), remain a mainstay even as U.S. lawmakers call on regulators to "pump the brakes" on merger approvals.

The latest round of deals kicked off last autumn with Exxon Mobil's $60 billion offer for Pioneer Natural and has spread through the U.S. energy industry, moving across Texas and North Dakota oil and gas producers to energy pipeline operators.

There were 18 oil and gas production tie-ups with disclosed prices totaling $30.29 billion, up from 25 deals valued at $24.4 billion in the same quarter a year ago, said Andrew Dittmar, Enverus' head of M&A research.

"Pressure built on companies like ConocoPhillips ( COP ) and Devon Energy ( DVN ), that has previously stayed out of the market, to keep pace with peers and grow in scale," said Dittmar.

The value of deals, however, slipped from a record $51 billion in the first quarter, according to Enverus data.

Conoco's proposed acquisition of Marathon Oil ( MRO ) represented most of last quarter's deal total. Devon Energy ( DVN ) this month has reinforced the pace with its $5 billion bid for shale oil producer Grayson Mills.

The average price per undeveloped drilling location in this year's oil production combinations climbed to $3.2 million, from an average of $1.9 million in 2023, Enverus data showed.

Oil and gas deals priced at less than $1 billion have been squeezed by a lack of capital and shifting investment goals by private-equity investors, according to M&A advisory firm Petrie Partners.

Among second-quarter deals: SM Energy ( SM ) agreed to buy XCL Resources for $2.55 billion, Crescent Energy ( CRGY ) bid $2.1 billion for SilverBow Resources ( SBOW ), and Matador Resources ( MTDR ) offered $1.9 billion for Ameredev II.

The Federal Trade Commission has not stopped any recent oil mergers but is reviewing ConocoPhillips ( COP ), Chevron, Occidental Petroleum ( OXY ), Chesapeake Energy, and Diamondback Energy deals.

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