U.S. Oil Mergers Down To $12 Billion

According to data published Thursday by energy analytics firm Enverus, U.S. oil and gas dealmaking dropped to $12 billion last quarter, down from the first quarter and about a third of the $34.8 billion in the same period last year.

“The spike in commodity prices that followed Russia’s invasion of Ukraine temporarily stalled M&A as buyers and sellers disagreed on the value of assets,” said a director at Enverus Intelligence Research, Andrew Dittmar.

After Russia’s invasion of Ukraine, U.S. crude oil futures prices soared to more than $123 a barrel in early March. Prices have since calmed as recession fears have emerged.

According to Dittmar, private investors across the U.S. shale patch have been forced to put properties on the market due to oil prices this year.

“The challenge is finding buyers willing to pay their asking prices,” he added.

Last quarter, the Permian Basin in west Texas and New Mexico generated 46% of the country’s total oil and gas deal value. Next in line were the Rockies with 12%, Midcontinent with 6%, Gulf Coast with 5%, and West Coast with 2%.  Deals were not recorded in the offshore Gulf of Mexico, eastern United States, or Alaska.

A private merger between Colgate Energy Partners III and Centennial Resource Development accounted for around a third of the total deal value.

Original source material for this article taken from here