US oil and gas M&A activity slows in Q4

Dealmaking in the US oil and gas industry halved in value in the fourth quarter from the third, with the annual total falling short of the pre-pandemic average, according to data published by analytics firm Enverus on Thursday.

Oil producers struck deals worth just $9 billion in the final three months of 2021, a 50 per cent slump from the third quarter's $18.5 billion. But the full year totaled $66 billion, a jump of 25 per cent thanks to a two-year peak in the second quarter.

M&A activity in the industry took a hit in 2020 from the pandemic pushing oil and gas prices to record lows, although commodity prices made a strong rebound last year, sparking a wave of consolidation.

That has, however, also pushed up valuations, making it difficult for buyers and sellers to agree on a price and leading to fewer but larger deals.

Upstream deals signed in 2020 and 2021 totaled 172 and 179, respectively, compared with an average of nearly 400 deals per year before Covid, according to Enverus data.

The slow end to the "second year of a Covid-influenced market" held total deal values below the $72 billion average from 2015 to 2019, Enverus said in a press release.