M&A Hot Streak Returns As 2Q21 Value Reaches $33 Billion

AUSTIN, Texas, July 12, 2021 /PRNewswire/ -- Enverus, the leading energy data analytics and SaaS technology company, is releasing its summary of 2Q21 U.S. upstream M&A activity. After a cold start to the year, upstream M&A resumed its scorching pace and recorded $33 billion from more than 40 deals with an announced value during the latest quarter, including seven deals worth more than $1 billion each. That is the highest quarterly value total since 2Q19 and is tied for the most announced deals above $1 billion since 2014.

In 2Q21, the targets of the acquisitions showed a significant shift. During 2020, consolidation between public companies focused on synergies drove activity. This year, there have been only two public company tie-ups above $1 billion: Bonanza Creek Energy's purchase of Extraction Oil & Gas and Cabot Oil & Gas merging with Cimarex Energy. Public companies instead turned to acquiring private and private equity-sponsored E&Ps headlined by Pioneer Natural Resources' purchase of Midland pure-play DoublePoint Energy.

"The uptick in acquisition activity targeting private equity-backed E&Ps is likely a welcome relief for sponsors that were challenged to find exit opportunities over the last few years," commented Enverus Senior M&A Analyst Andrew Dittmar. "The deals targeting private E&Ps are less about cost-cutting synergies and more about adding inventory."

Private equity sponsors are receiving mostly buyer's equity in these sales, with stock constituting ~70% of the value paid. "Following a rally in equities that raised the valuation for public E&Ps, their stock represents an attractive currency to buy private and PE-backed counterparts," added Dittmar.

"As long as there isn't a sharp retreat in commodity prices, M&A activity is likely to remain strong during the second half of 2021," said Dittmar.

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

About Enverus

Enverus is the leading energy SaaS company delivering highly-technical insights and predictive/prescriptive analytics that empower customers to make decisions that increase profit. Enverus' innovative technologies drive production and investment strategies, enable best practices for energy and commodity trading and risk management, and reduce costs through automated processes across critical business functions. Enverus is a strategic partner to more than 6,000 customers in 50 countries. Learn more at Enverus.com.

SOURCE Enverus