Middle East

US oil and gas M & A activity slows in Q4

Trading in the US oil and gas industry halved from the third quarter to the fourth quarter, below the pre-pandemic average, according to data released Thursday by analytics firm Enverus.

Oil producers closed just $ 9 billion worth of deals in the last three months of 2021, down 50% from $ 18.5 billion in the third quarter. However, the total for the full year was $ 66 billion, an increase of 25% thanks to the two-year peak in the second quarter.

Industry M & A activity was hit in 2020 as oil and gas prices hit record lows due to a pandemic, but commodity prices recovered significantly last year, creating a wave of integration.

However, it also boosts valuations, making it difficult for buyers and sellers to agree on prices, leading to fewer but larger transactions.

According to Enverus data, there were a total of 172 and 179 upstream transactions signed in 2020 and 2021, respectively, while the average annual transaction before COVID was close to 400.

In a press release, Emberlas said the slow end of “the second year of the COVID-affected market” was below $ 72 billion in average trading value from 2015 to 2019.

Continental Resources Inc’s $ 3.25 billion purchase of Delaware assets from Pioneer Natural Resources surpassed the fourth-quarter oil M & A chart, with Southwestern Energy taking over Blackstone-backed GeoSouthern assets in Haynesville. It was acquired for about $ 1.85 billion.

The Delaware portion of the Permian basin and Haynesville were the two most active plays, accounting for 80% of total trading value in the fourth quarter, Enverus data show.

“Overall, the M & A market should be set in active 2022. Inventory pricing in areas like the Delaware Basin and Haynesville remains attractive to buyers and additional assets are available in the market. “It should be,” said Andrew Dittmer, director of Emberlas.

(Report by Rithika Krishna, edited by Devika Syamnath)

https://www.oedigital.com/news/493484-us-oil-and-gas-m-a-activity-slows-in-q4 US oil and gas M & A activity slows in Q4

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