US oil and gas M&A nears 2023 record, focus shifts away from Permian, Rystad says By Reuters

By Shariq Khan

NEW YORK (Reuters) – U.S. oil and gas producers’ appetite for dealmaking is nearing last year’s record high, as growing interest in smaller oil fields offset slower activity in the Permian Basin, the biggest oil producer, they said on Wednesday. the analysts of the consulting firm Rystad.

Nearly $100 billion has been spent by U.S. manufacturers on mergers and acquisitions (M&A) so far this year, and another $46 billion in assets are currently up for sale, according to a Rystad analysis through the end of August.

A record $155 billion in deals focused on production and exploration were signed in 2023, according to Rystad’s balance sheet.

Industry consolidation reached a peak last year as top oil producers unveiled mega-bids to boost both their production and stockpile of drilling sites. For private owners, it presented a rare window to profitably exit investments.

“Private equity-backed oil producers will continue to sell assets to tap public companies’ appetite for stocks and secure premium valuations as competition among potential buyers increases,” Raina said.

While last year’s rush focused almost exclusively on the Permian Basin in Texas and New Mexico, intense competition for acreage in the top U.S. oil field has sent opportunistic buyers looking elsewhere.

SM Energy (NYSE: ), which is expanding its footprint in Utah’s Uinta Basin by acquiring XCL Resources for $2 billion, said good deals have become harder to find in the Permian.

“We would love to add this type of asset in the Permian, but getting something of this size close to that price is very difficult right now,” Wade Pursell, SM Energy’s chief financial officer, said on a conference call on Tuesday.

Permian-focused deals accounted for just 46% of the total in the first half of this year, compared with 92% in the second half of last year, according to Rystad’s analysis.

Deals in North Dakota’s Bakken basin rose 12 percent in the first half of this year, from almost none in the second half of last year. Pennsylvania’s Marcellus basin accounted for 14 percent of transactions in the first half of this year, while the Eagle Ford (NYSE: ) basin in southeast Texas accounted for 13 percent, according to Rystad data.