Weak oil prices and limited shale acreage will impact energy M&A in 2025

From Yahoo Finance: 2025-04-23 09:34:00

The U.S. upstream oil and gas M&A market faces challenges as oil prices drop and prime acreage becomes scarce, Enverus reports. Despite a strong start to the year with $17 billion in deals, Diamondback Energy drove nearly half of the activity with acquisitions totaling over $8 billion in the first quarter.

The oil and gas industry saw a record $192 billion in deals in 2023, leading to a series of blockbuster takeovers by major companies. However, the current downturn in mergers and acquisitions is expected due to limited opportunities and high asset prices, especially with WTI crude futures falling to multi-year lows and OPEC+ countries increasing oil output.

Buyers are feeling the pressure as sellers are reluctant to unload assets at a discount amidst a scarcity of high-quality shale inventory and lower oil prices. This standoff over fair asset pricing is expected to hinder M&A activity in the upstream deal markets. Notable deals include Paloma Natural Gas selling Haynesville assets for $1.2 billion and EQT’s $1.8 billion purchase of Olympus Energy’s assets to expand in the Marcellus region.



Read more at Yahoo Finance: Weak oil prices, limited shale acreage to hit energy M&A in 2025, Enverus says