Oil and gas deal activity falls in third-quarter

Oil and gas deal activity falls in third-quarter

Reuters - The activity in the US 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 cools from post-pandemic consolidations and focuses on selling non-core assets.

Mergers and acquisitions M&A activity in the July-September quarter exceeded $18.5 billion, down 44% from the first quarter, even as it beat the five-year average M&A value.

The sense of urgency seems to have left the deal market, Enverus director Andrew Dittmar said.

Through the end of this year, most businesses will likely see large equity deals as they trim their portfolios with the chance of an occasional private company merger or larger public E&P sale. The refinery Conocophillips led the quarterly ranks, the Enverus report showed, after buying oil producer Royal Dutch Shell Plc's assets in the Delaware Basin for $9.5 billion in September.

Deals by private equity firms saw an increase as they purchased assets that oil companies deemed non-core to their development plans, the report said, adding that such privately funded buyers increased their share of acquisitions to about one-fifth by value.

These assets tended to lay outside oil-prolific areas like the Permian Basin of West Texas and New Mexico.

It was inevitable that the hungriest buyers and sellers would find their deals and activity would return to the average. D'Tribmar says we are hitting the inflection point.