BAKU, Azerbaijan, April 30. Following a robust first quarter marked by unprecedented dealmaking, Rystad Energy projects that the global upstream sector could witness an additional $150 billion surge in merger and acquisition (M&A) transactions throughout the remainder of 2024, Trend reports.
The momentum is fueled by a flurry of activity that has already propelled global M&A deal value beyond the $64 billion milestone for the year, marking the most vigorous first-quarter performance since 2019 and showcasing a 145 percent surge compared to the same period in 2023. Notably, the surge is primarily attributed to a wave of consolidation sweeping through the US shale landscape, Rystad Energy noted.
The North American region emerged as the epicenter of deal activity, the research noted, accounting for $54 billion in deals during the first quarter, representing approximately 83 percent of the global total.
Analysts anticipate North America to maintain its prominence, with an estimated $80 billion worth of assets still awaiting acquisition opportunities. Within this landscape, the US shale sector is anticipated to spearhead the activity, with assets totaling over $52 billion poised for acquisition.
While the Permian Basin has historically dominated dealmaking endeavors, other shale plays are now emerging as attractive investment prospects. Approximately $41 billion worth of non-Permian opportunities beckon investors, including potential acquisitions such as Grayson Mill Energy in the Bakken, XcL Resources in the Uinta Basin, ExxonMobil's Bakken portfolio, EQT's non-operated Marcellus assets, and select Haynesville assets from Shell and BP.
Major industry players including ExxonMobil, Chevron, Occidental Petroleum (Oxy), and Diamondback Energy are set to catalyze short-term M&A fervor through strategic portfolio adjustments. Having recently completed significant acquisitions, these companies now seek to divest non-core assets, creating avenues for regional upstream players to expand their foothold. For instance, Chevron plans to divest assets valued at approximately $10 billion to $15 billion by 2028, while Oxy aims to divest between $4.5 billion and $6 billion, signaling a dynamic landscape ripe for transformative dealmaking in the coming months.