Activity broadens as high prices create a
headwind for Permian deals
CALGARY,
AB, July 30, 2024 /PRNewswire/ -- Enverus
Intelligence Research (EIR), a subsidiary of Enverus, the most
trusted energy-dedicated SaaS company that leverages generative AI
across its solutions, is releasing its summary of 2Q24
upstream M&A activity.
Upstream M&A activity notched its third consecutive quarter
of heightened value with more than $30
billion transacted. That brings year-to-date activity,
including July deals, to nearly $90
billion and nearly $250
billion transacted in the last 12 months. Prior to the
latest run of consolidation, quarterly M&A value had only
topped $30 billion three times since
the start of 2017.
"M&A momentum carried into the second quarter as pressure
built on companies like ConocoPhillips, Devon Energy and SM Energy,
that had previously stayed out of the market to keep pace with
peers and grow in scale," said Andrew
Dittmar, principal analyst at EIR. "With the highest quality
inventory selling at premium pricing, there has been a scramble for
middle-tier inventory that provides strong returns even if it isn't
as economic as core Permian assets."
An additional advantage of buying in plays like the Eagle Ford
and Williston Basin is the ability to capitalize on the potential
of older horizontal wells by recompleting them with what the
industry terms refracs. Companies are also looking for
opportunities to expand their inventory base by developing emerging
benches, as SM will test on its new Uinta Basin position.
There is still room for private equity companies to divest more
portfolio companies, particularly in the Eagle Ford and SCOOP|STACK
plays. Companies are also likely waiting on a rally in natural gas
prices to divest more portfolio companies focused on that
commodity. Beyond rising gas prices, more non-core asset selling is
another potential tailwind for M&A in the back half of
2024.
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About Enverus Intelligence Research
Enverus
Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus
that publishes energy-sector research focused on the oil, natural
gas, power and renewable industries. EIR publishes reports
including asset and company valuations, resource assessments,
technical evaluations and macro-economic forecasts; and helps make
intelligent connections for energy industry participants, service
companies and capital providers worldwide. EIR is registered with
the U.S. Securities and Exchange Commission as a foreign investment
adviser. Enverus is the most trusted, energy-dedicated SaaS
company, with a platform built to create value from generative AI,
offering real-time access to analytics, insights and benchmark cost
and revenue data sourced from our partnerships to 95% of U.S.
energy producers, and more than 40,000 suppliers. Learn more at
Enverus.com.
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SOURCE Enverus