KEY POINTS
- U.S. oil and gas deals hit $105 billion in 2024, slowing in Q4.
- Companies are turning to refracking and mature shale fields.
- Natural gas mergers surged, hitting $20 billion for the first time since 2016.
The U.S. upstream oil and gas sector recorded $105 billion in mergers and acquisitions (M&A) in 2024, making it one of the most active years for industry dealmaking.
However, activity slowed in the second half of the year as buyers found fewer available assets, according to a report by consulting firm Enverus.
Last year’s deal total lagged behind the record $192 billion in 2023, which included the massive $60 billion merger between Exxon Mobil and Pioneer Natural Resources.
Despite the decline, the Permian Basin remained a hotbed for acquisitions, though companies are now exploring other regions as prime targets become scarce.
“We are going to see some unexpected moves in 2025, as operators consider regions and plays we wouldn’t have expected,” said Enverus principal analyst Andrew Dittmar.
Companies look beyond Permian as refracking gains traction
With prime Permian Basin assets dwindling, smaller exploration and production (E&P) firms are turning to mature shale fields such as the Williston Basin in North Dakota and Eagle Ford in South Texas. These areas offer opportunities for refracking—revitalizing old wells to boost output at a lower cost than drilling new wells.
“For buyers considering the last remaining Permian targets, the question will be whether the resource expansion upside is worth the price,” Dittmar said.
Despite the slowdown in late 2024, some significant transactions took place. The biggest deal of the fourth quarter was Coterra Energy’s $3.95 billion acquisition of Avant Natural Resources and Franklin Mountain Energy in the Delaware Basin.
Another major private acquisition was FourPoint Energy’s $2 billion purchase of Ovintiv’s Uinta assets in Utah.
Natural gas M&A sees surge amid growing demand
A notable trend in 2024 was the rise in natural gas-focused mergers and acquisitions, which quadrupled compared to 2023, surpassing $20 billion for the first time since 2016.
Industry experts expect this momentum to continue, driven by growing demand for liquefied natural gas (LNG), data centers, and power generation.
“We will see more focus on natural gas soon, given the rising excitement around LNG exports, power demand, and data center expansion,” Dittmar told Reuters.
Looking ahead, limited acquisition targets and rising costs may push smaller operators to consider selling, leading to further industry consolidation.
