Corporate Mergers Boost 3Q20 Upstream M&A

Third-quarter value soars to $21 billion as E&Ps eye further consolidation

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Oct 05, 2020, 10:00 ET

AUSTIN, Texas, Oct. 5, 2020 /PRNewswire/ -- Enverus, the leading oil and gas SaaS and data analytics company, is releasing its summary of 3Q20 U.S. upstream M&A. While the third quarter's tempo of 28 deals with a disclosed value is tied with 1Q20 for the worst showing in 10 years, a couple of big corporate acquisitions pushed total transaction value to $21 billion. That is a strong quarterly deal total by historical standards.

The largest deal of the third quarter was Chevron's $13 billion acquisition of Noble Energy, which targeted assets in the DJ and Permian basins, as well as Eastern Mediterranean gas production. While a fraction of the cost of Chevron's attempted Anadarko acquisition last year, its purchase of Noble is still tied for the fourth largest global upstream deal since 2014.

The largest pure U.S. shale consolidation move came at the end of the quarter, when Devon Energy and WPX Energy announced a merger that creates a combined company with a $12 billion enterprise value and a concentration in the Delaware Basin. Both Chevron's acquisition of Noble, and Devon's merger with WPX, are structured with little premium and all-stock consideration.

"There is a broad consensus that consolidation is a net positive for the industry," commented Enverus Senior M&A Analyst Andrew Dittmar. "Including the corporate deals from 2019, that process looks to be well underway. There is room for further mergers, but it can be a challenge to find the right asset and balance sheet fits for accretive deals. It may take several more years for consolidation to play out."

For the remainder of 2020, there is the potential for additional corporate deals while the market for asset deals is likely to remain sluggish.

View Enverus' full announcement including extended commentary and Top Five Deal Table.

About Enverus
Through its SaaS platform, Enverus is the leading data, software and insights company providing innovative technologies and predictive/prescriptive analytics, empowering customers to navigate the future. Enverus' solutions deliver value to more than 6,000 customers in 50 countries across the upstream, midstream and downstream sectors, enabling the industry to be more collaborative, efficient and competitive. Enverus is a portfolio company of Genstar Capital. Creating the future of energy together. Learn more at www.enverus.com.

SOURCE Enverus