Upstream M&A falls 13% Year-Over-Year in 2022 to $58B

Deal count plunges to the lowest level since 2005 as buyers selectively target top-tier assets in large deals

CALGARY, AB, Jan. 24, 2023 /PRNewswire/ -- Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, is releasing its summary of 4Q22 upstream merger and acquisition (M&A) activity. For 2022, U.S. upstream M&A saw $58 billion transacted in 160 deals, including $13 billion from 26 deals in the fourth quarter. While deal values are down just about 20% from pre-pandemic averages, the volume of deals has collapsed to a nearly two-decade low as activity has been driven by large companies targeting the highest quality assets in billion-dollar-plus deals.

"Large-cap public companies like Devon Energy, Diamondback Energy, and Marathon Oil dominated deal activity in the back half of 2022," said Andrew Dittmar, director at Enverus Intelligence Research. "These buyers have the balance sheet strength and favorable stock valuations to take advantage of large, high-quality offerings from private sellers."

Two of the largest deals in the fourth quarter of 2022 were Midland Basin acquisitions by Diamondback, historically one of the more active buyers in the region. "E&Ps of all sizes have proven to investors they can be profitable and pay dividends," added Dittmar. "Now the key question is how long they can sustain profitable margins."

Private equity sellers have accounted for most of the assets on the market in recent years, and Enverus anticipates that trend continuing. Overall, the need for public companies to secure inventory is likely to keep the M&A market active in 2023. "The challenge for deals, as is often the case in this industry, will be bridging the bid-ask spread and navigating commodity price volatility," concluded Dittmar.

Enverus is the most trusted, energy-dedicated SaaS platform, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 98% of U.S. energy producers, and more than 35,000 suppliers. Our platform, with intelligent connections, drives more efficient production and distribution, capital allocation, renewable energy development, investment and sourcing, and our experienced industry experts support our customers through thought leadership, consulting and technology innovations. We provide intelligence across the energy ecosystem: renewables, oil and gas, financial institutions, and power and utilities, with more than 6,000 customers in 50 countries. Learn more at Enverus.com. 

Enverus Intelligence Research, Inc. is a subsidiary of Enverus and publishes energy-sector research that focuses on the oil and natural gas industries and broader energy topics including publicly traded and privately held oil, gas, midstream and other energy industry companies, basin studies (including characteristics, activity, infrastructure, etc.), commodity pricing forecasts, global macroeconomics and geopolitical matters. Enverus Intelligence Research, Inc. is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.

SOURCE Enverus