US Oil Mergers Hit Six-Quarter Low With $12 Billion In Deals

What’s going on here?

US oil mergers fell to $12 billion in Q3 2024, marking the lowest level in six quarters, as the industry grapples with exhausted resources and dwindling targets after last year’s $192 billion surge.

What does this mean?

Following an unprecedented $192 billion in mergers last year, the US oil sector is experiencing a notable drop in activity. Depleted resources and a lack of viable targets, particularly in the Permian basin, have contributed to this slowdown. Significant transactions include Occidental Petroleum selling $818 million in assets to Permian Resources, with APA Corp and Quantum Capital Group also adjusting their holdings. Despite the downturn, Devon Energy completed a substantial $5 billion acquisition in North Dakota. However, Q3 mergers decreased significantly from Q2’s $30 billion due to regulatory delays. This trend signals a pivot towards exploring opportunities outside established shale regions.

Why should I care?

For markets: Oil deal slowdown mirrors resource crunch.

The stark drop in US oil mergers highlights tighter market conditions, with fewer appealing targets as major shale areas like the Permian basin run low. Investors may consider smaller shale prospects and emerging regions for growth, given Q3’s halved value compared to Q2’s.

The bigger picture: New horizons in oil investments.

With traditional areas like the Permian basin nearing resource limits, focus is shifting to less-developed oil fields. This may transform the industry’s landscape, drawing interest from private firms and smaller public entities eager to diversify investments and capitalize on new opportunities beyond major shale zones.

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Originally Posted October 16, 2024 – US Oil Mergers Hit Six-Quarter Low With $12 Billion In Deals