May 20 (Reuters) - Dealmaking in the U.S. oil patch has

slowed to a crawl in 2025, with the activity expected to stay

muted for the rest of the year, as some prolific buyers focus on

squeezing out value from their past acquisitions, while others

curb their appetite for takeovers due to weak oil prices and

trade uncertainty.

Oil companies have spent $17 billion on acquisitions in the

last three months, a steep fall from the height of dealmaking in

the third quarter of 2023, where they splurged $144 billion on

M&A.

Benchmark U.S. crude recently slid to about $55 a

barrel from about $78 in January, just before President Donald

Trump took office, dragged down by rising OPEC+ output and

renewed trade tensions.

"We're in a period right now where there's so much noise and

volatility that not a lot gets done," Diamondback Energy CFO

Kaes Van't Hof said on a recent earnings call.

"Anything that we would look at would have to be extremely

cheap, and I just don't think we're there yet today."

Investor caution also stems from concerns over Trump's trade

policies.

Despite his push to boost U.S. drilling, trade tensions

could dampen growth and demand.

"(Deal) activity is likely to stay muted for the rest of

1H25 but there could be a pickup in the back half of the year,

particularly if trade deals are announced that reduce the odds

of a U.S. recession," said Andrew Dittmar, principal analyst at

Enverus

The challenge is finding the right fit as investors do

not want size for size's sake but credible in-field operational

synergies, Dittmar added.

Most premium assets in the Permian - North America's top

shale play - have also been snapped up during the M&A frenzy,

leaving behind mostly those acreages that are not highly viable

in the current low oil-price scenario.

That's making dealmaking even harder, as buyers tread

carefully to avoid overpaying for second-tier assets.

"Nobody wants to dilute their portfolio with acreage out on

the fringe of the play," said Raoul LeBlanc, VP at S&P Global

Commodity Insights.

BIG PLAYERS STAY CAUTIOUS

Even large players are showing restraint.

Exxon Mobil ( XOM ), fresh off its $60 billion Pioneer deal,

is focused on value creation.

"One plus one has to equal three," CEO Darren Woods said

during a recent earnings call, stressing any deal must create

outsized value.

Others are still digesting recent purchases.

"We've obviously been very busy over the last year and a

half with Endeavor and Double Eagle," Van't Hof said, referring

to two major Permian Basin buys.