According to data released on Monday, the number of $1 billion or more Oil and Gas mergers in the United States increased last quarter to the highest level since 2014. Higher energy and stock prices led to more significant oil patch acquisitions. Producers in the United States are consolidating oil and natural gas prices to recover from last year’s catastrophic fall and trade at multi-year highs this month.
Smaller producers are increasingly picking up unloved sites in a gamble on ongoing Oil and Gas demand, as some large oil corporations change their purchase focus to renewables. According to energy data provider Enverus Inc, the total value of the 40 reported agreements last quarter was $33 billion, up from $44.5 billion for the entire year.
According to Andrew Dittmar, Enverus’ senior M&A analyst, the quarter’s seven $1 billion+ purchases were mainly in Texas and Colorado oilfields. However, a fifth of the total value was spent on natural gas holdings in the United States east. Natural gas prices in the United States have risen 40% this year, prompting Southwestern Energy to buy Indigo Natural Resources for $2.7 billion and EQT Corp to buy northeast gas producer Alta Resources for $2.9 billion.
Dittmar said, “There is still a lot of activity out there. Public companies are not done consolidating smaller, closely-held producers. If commodity prices stay strong, we’ll see a fairly active rest of the year.” Due to increased buyer interest, several major oil firms, including Royal Dutch Shell, Chevron, Exxon Mobil, and Occidental Petroleum, consider or have put U.S. oil properties on the market.Cabot Oil and Gas‘ $7.4 billion merger with Cimarex Energy and Pioneer Natural Resources’ $6.4 billion acquisition of closely held DoublePoint Energy, both for assets in the Permian Basin of West Texas and New Mexico, were the top deals by price last quarter.