October 12 (Businesshala) – Dealmaking in the U.S. oil and gas industry in the third quarter of 2021 fell from a two-year high in the previous quarter, according to data analytics firm Enverus on Tuesday, as the industry cooled off from a post-pandemic consolidation. and focuses on selling non-core assets.
Merger and acquisition (M&A) activity totaled $18.5 billion in the July-September quarter, down 44% from the second quarter, even as it surpassed the five-year quarterly average M&A value.
“A sense of urgency has left the bargain market,” said Enverus director Andrew Dietmar.
“By the end of the year, we are likely to see mostly small-sized asset deals as companies trim their portfolios with the occasional large public company merger or private E&P sale opportunity.”
After buying oil giant Royal Dutch Shell Plc’s assets in the Delaware Basin in September for $9.5 billion, oil producer ConocoPhillips led the quarterly ranks, Envers reported.
Private equity firms saw an uptick in deals as they bought assets that oil companies considered non-core to their growth plans, the report said, adding that such privately funded buyers opted for acquisitions. increased his share by about one-fifth of the value.
These assets were outside oil-rich areas such as West Texas and the Permian Basin of New Mexico.
“It was inevitable that the most hungry buyers and sellers would find their deals and activity would revert back to average. Looks like we are hitting that inflection point,” said Ditmar. (Reporting by Ruhi Soni in Bengaluru; Editing by Shailesh Kuber)