Upstream M&A sails on with $30 billion in 2Q24

Activity broadens as high prices create a headwind for Permian deals

CALGARY, AB, July 30, 2024 /PRNewswire/ -- Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, is releasing its summary of 2Q24 upstream M&A activity.

Upstream M&A activity notched its third consecutive quarter of heightened value with more than $30 billion transacted. That brings year-to-date activity, including July deals, to nearly $90 billion and nearly $250 billion transacted in the last 12 months. Prior to the latest run of consolidation, quarterly M&A value had only topped $30 billion three times since the start of 2017.

"M&A momentum carried into the second quarter as pressure built on companies like ConocoPhillips, Devon Energy and SM Energy, that had previously stayed out of the market to keep pace with peers and grow in scale," said Andrew Dittmar, principal analyst at EIR. "With the highest quality inventory selling at premium pricing, there has been a scramble for middle-tier inventory that provides strong returns even if it isn't as economic as core Permian assets."

An additional advantage of buying in plays like the Eagle Ford and Williston Basin is the ability to capitalize on the potential of older horizontal wells by recompleting them with what the industry terms refracs. Companies are also looking for opportunities to expand their inventory base by developing emerging benches, as SM will test on its new Uinta Basin position.

There is still room for private equity companies to divest more portfolio companies, particularly in the Eagle Ford and SCOOP|STACK plays. Companies are also likely waiting on a rally in natural gas prices to divest more portfolio companies focused on that commodity. Beyond rising gas prices, more non-core asset selling is another potential tailwind for M&A in the back half of 2024.

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About Enverus Intelligence Research 
Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers, and more than 40,000 suppliers. Learn more at Enverus.com.

SOURCE Enverus