Upstream M&A slides to $9B in 1Q23

Eagle Ford M&A rallies and shows late innings shale still has opportunities

CALGARY, AB, May 2, 2023 /PRNewswire/ -- Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, is releasing its summary of 1Q23 upstream merger and acquisition (M&A) activity. In Q1, U.S. upstream M&A saw $8.6 billion transacted in 16 deals, with more than $5 billion in the Eagle Ford for a surprising resurgence in that mature play. While deal value is down about 20% versus the first quarter average since 2016, deal volume also continued its multi-year collapse with a disclosed volume of 80% less than the Q1 average. That resulted in an average deal size of more than $500 million.

"Last quarter was an outlier in terms of the deal targets and types for upstream transactions," said Andrew Dittmar, director at Enverus. "Rather than public E&Ps focusing on buying undeveloped inventory in the Permian Basin from private companies, most of the deals targeted mature assets in the Eagle Ford and included more public-to-private transactions plus a corporate merger."

For undeveloped land, companies will need to turn to the Permian Basin. Matador Resources was among the E&Ps looking to expand in the Permian and paid $1.6 billion for EnCap's Advance Energy Partners with holdings in the Delaware Basin. The deal is part of a rush of private equity (PE) exits, with EnCap among the most active sellers. That also includes the early April divestment of three EnCap portfolio companies in the Midland Basin to Ovintiv for more than $4 billion.

"M&A may have slowed, and shale may be in its later innings, but there are still opportunities to be had," concluded Dittmar.

View Enverus' full announcement including extended commentary and charts featuring Top Five Deals of Q1.

Additional Resources

• Royalty M&A 2023 debut: Kimbell's Midland Basin $143M buy
• Upstream M&A falls 13% year-over-year in 2022 to $58B

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About Enverus Intelligence Research
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