Record-Breaking Surge: Oil and Gas Majors Propel U.S. Energy Dealmaking to $192 Billion in 2023


Last year, the U.S. energy sector witnessed a surge in blockbuster takeovers by oil and gas majors, propelling the value of dealmaking to an unprecedented $192 billion—more than triple the amount in 2022, as reported by analytics firms Enverus on Tuesday.

The Permian shale basin, spanning West Texas and New Mexico and recognized as the largest U.S. oilfield, saw a remarkable uptick in acquisitions over the last two years. This surge was fueled by a spike in oil prices, triggered by robust demand following Russia's invasion of Ukraine. Producers actively sought out producing wells to secure future supplies.

Notably, the fourth quarter of the year was marked by three pending deals—Exxon Mobil's offer for Pioneer Natural Resources, Chevron's bid for Hess, and Occidental Petroleum's proposal for CrownRock—which collectively drove deal values to a staggering $144 billion, setting a record for any quarter and year.

Andrew Dittmar, Senior Vice President at Enverus, remarked, "Oil and gas are undergoing a historic consolidation wave comparable to what occurred in the late 1990s and early 2000s, giving rise to the modern supermajors."

Anticipating a continuation of deal mania, Dittmar pointed to potential divestitures and the expected offer from closely held shale oil and gas producer Endeavor Energy. Reuters reported last month that the Midland, Texas-based company could fetch between $25 billion and $30 billion in any sale.

Buyers seeking to divest portions of these significant acquisitions could generate a flurry of smaller deals in the coming year, Dittmar suggested. Furthermore, private-equity firms, having raised new capital, are likely to express interest in these non-core assets.

In terms of specific figures, oil-producing asset acquisitions dominated the U.S. market in 2023, totaling approximately $186 billion, with Exxon's pending $65 billion offer for Pioneer standing out as the largest deal.

Conversely, natural gas-focused deals saw a smaller overall spending of $6 billion last year, compared to $10.6 billion in 2022. The most significant deal in this category was Tokyo Gas' $2.7 billion acquisition of Texas-based Rockcliff Energy, indicating the Japanese company's efforts to expand its North American shale gas operations to meet the growing demand for natural gas as an energy transition fuel.

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