US oil and gas fusion activity slowed in the fourth quarter

(Reuters) – US oil and gas agreements fell by half in the fourth quarter compared to the third quarter, and the annual total fell below the pandemic average, according to data released Thursday by analyst firm Enverus.

Oil producers made $ 9 trillion in deals in the last three months of 2021, a 50% drop from $ 18.5 trillion in the third quarter. But the full year was $ 66 billion, a 25% jump from a two-year high in the second quarter.

Industrial M&A activity was hit in 2020 by a pandemic that pushed oil and gas prices to record lows, although commodity prices rebounded sharply last year, triggering a surge in consolidation.

This, however, has also increased valuations, making it difficult for buyers and sellers to agree on a price and reach smaller but larger deals.

According to Enverus data, the upstream agreements signed in 2020 and 2021 were 172 and 179, respectively, compared to almost 400 agreements per year before COVID.

The slow end of the “second year of the COVID-affected market” had the value of the total deal below an average of $ 72 billion between 2015 and 2019, Enverus said in a press release.

Continental Resources (NYSE 🙂 Inc. has purchased $ 3.25 billion in Delaware assets. Pioneering Natural Resources (NYSE 🙂 dominated the M&A charts for oil in the fourth quarter, followed by Southwestern Energy (NYSE 🙂 Co. Blackstone-backed GeoSouthern assets taking over $ 1.85 billion in Haynesville.

The Dianware part of the Permian Basin and Haynesville were the two most active games, accounting for 80% of the total deal in the fourth quarter, Enverus data showed.

“Overall, the M&A market should be set for assets by 2022. Inventory prices in areas such as the Delaware Basin and Haynesville are still attractive to buyers and additional assets should be available in the market,” said Enverus CEO Andrew Dittmar.