$144B Of Transactions In Recording-Setting 4Q23 For Upstream M&A

ExxonMobil and Chevron lead the charge to secure future resource, but will this historic consolidation continue?

Calgary, AB /PRNewswire/ - Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company, is releasing its summary of Q4 and full-year 2023 upstream merger and acquisition (M&A) activity. Q4 recorded a massive $144 billion in upstream M&A, the largest quarter EIR has tracked. That pushed full-year 2023 value to more than $190 billion, also setting a record.

"Oil and gas is undergoing a historic consolidation wave comparable to what occurred in the late 1990s and early 2000s giving rise to the modern supermajors," said Andrew Dittmar, senior vice president at Enverus. "After a decade of lowered investment in exploration and with the major U.S. shale plays largely defined, M&A has become the preferred tool to replace declining reserves and secure longevity in these companies' profitable upstream businesses."

Among unconventional oil resource plays in the U.S., the Permian stands well atop the heap for remaining resource, offering both the most high-quality remaining drilling opportunities and the greatest potential for resource expansion from the prolific region's stacked resource benches. It is unsurprising then that the Permian dominated M&A activity in 2023 with $103 billion transacted.

"The Permian was a juggernaut for deals in 2023, both for private sales and corporate M&A," said Dittmar. "Buyers increasingly showed a willingness to pay whatever it took to boost their footprint in this critical play, and prices for future drilling inventory climbed to new highs. While the buyer interest is still there, we are unlikely to see an encore in 2024 because the available list of attractive takeout targets has grown short. At the top of that reduced target list is privately held Endeavor Energy Resources, which has an excellent chance of generating the largest transaction of 2024."

In 2023, upstream M&A was overwhelmingly focused on oil, with $186 billion in deals targeting crude compared to just $6 billion in gas-centric acquisitions. There is likely to be increasing interest in gas assets as the long-awaited U.S. LNG ramp nears with the U.S. slated to add 10 Bcf/d of LNG export capacity over the next 36 months.

View Enverus' full announcement including extended commentary.

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 platform, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 98% of U.S. energy producers, and more than 35,000 suppliers. Learn more at Enverus.com.