USA Upstream M&A Hit $38B in Q1

U.S. upstream mergers and acquisitions (M&A) hit $38 billion in the first quarter of this year before volatility “pause[d]… the market”, Enverus Intelligence Research (EIR) noted in a statement sent to Rigzone.

EIR outlined, however, that this “volatility driven slowdown” is expected to reverse and projected in the statement that higher oil prices are set to “trigger [a] wave of deals as private sales accelerate”.

“U.S. upstream deal value reached $38 billion in 1Q26, the highest quarterly total in two years, before activity slowed sharply in March amid increased crude price volatility,” EIR said in the statement.

“Despite the pause, higher oil prices are expected to accelerate a rebound in dealmaking, particularly by enabling more private E&Ps to pursue sales while supporting continued corporate consolidation,” it added.

A chart outlining the top five U.S. upstream deals in the first quarter, which was included in the statement, showed that a $25.4 billion deal between Devon Energy and Coterra Energy was the most valuable deal of the quarter, followed by a $7.5 billion deal between Mitsubishi and Aethon III, a $3 billion deal between Flywheel Energy and Ovintiv, a $950 million deal between Caturus Energy and SM Energy, and a $355 million deal between Crescent Energy and an undisclosed seller.

“Activity in early 2026 was driven largely by corporate consolidation, including a $25 billion merger by Devon Energy and Coterra Energy that contributed about two-thirds of quarterly deal value,” EIR said in the statement.

“Over the past six months, total deal value exceeded $60 billion as the market continued to build momentum. However, transaction count declined in 1Q26, with only eight deals over $100 million recorded, tying a post-2020 low,” it added.

“The slowdown in volume reflects less active deal flow in March given uncertainty in oil markets once the Iran conflict commenced,” it continued.

EIR noted in the statement that buyer composition continues to evolve, adding that asset-backed securitization (ABS) financing is playing a growing role in production-weighted acquisitions.

“Recent transactions underscore sustained demand from ABS-linked buyers, including Ovintiv’s $3 billion sale of Anadarko Basin assets in the first quarter to Flywheel Energy, a buyer that has deployed ABS financing in past deals,” EIR said.

“Diversified Energy’s recent $1.175 billion acquisition of Anadarko Basin assets from Camino Natural Resources was publicly linked to an ABS placement and demonstrates continued appetite for cash-flowing production from this buyer pool,” it noted.

EIR also highlighted that international capital remains active, “particularly in gas-weighted regions”.

“Gulf Coast-adjacent assets, including those in the Haynesville, continue to attract strong interest from Asian buyers, with Mitsubishi’s purchase of Aethon Energy for $7.6 billion highlighting this trend,” EIR stated.

“Limited remaining Haynesville targets are likely to push buyers to evaluate alternative regions such as Appalachia despite infrastructure constraints, or even gassier portions of the Permian once a pipeline buildout helps alleviate extremely poor gas pricing in the region,” EIR projected in the statement.

EIR went on to note that higher oil prices are shifting seller behavior, which it outlined increases the likelihood of private sales.

“Better pricing is expected to encourage more private E&Ps to bring assets to market, including a handful of remaining targets in the Permian, while also making mature plays like the Eagle Ford and Williston significantly more economic to develop,” it said.

EIR also stated that inventory pricing remains a central theme, noting that pricing for oil-weighted inventory “remained resilient in 2025 even in a lower crude price environment” and that rising oil prices “are expected to further lift inventory values as buyers rush to secure remaining opportunities”.

Looking ahead, EIR said in the statement that it expects deal activity “to follow historical patterns, where periods of volatility-driven slowdowns are followed by sharp recoveries once markets stabilize”.

It said a material shift in crude prices higher will add fuel to this rebound.

“The market entered a temporary holding pattern as volatility clouded the outlook for oil prices, but the case for higher for longer oil prices is strengthening and creating the setup for an M&A rebound,” EIR Principal Analyst Andrew Dittmar said in the EIR statement.

“We expect that to translate into more private companies coming to market, something we are already starting to see, and continued consolidation among public operators,” he added.

“We are likely heading into another tsunami of consolidation as higher oil prices supercharge both private companies going to market and public E&P appetite for deals, both corporate consolidation and private asset sales,” Dittmar continued.

“This, combined with strong appetite from private capital, both ABS and traditional private equity, this sets up the market for a very busy rest of the year,” he predicted.

In a statement sent to Rigzone Earlier this year, EIR said U.S. upstream M&A “regained momentum” in the fourth quarter of 2025.

“After a midyear slowdown, U.S. upstream M&A regained momentum in 4Q25, closing with $23.5 billion in announced deals and pushing full-year 2025 activity to $65 billion,” EIR said in that statement.

“The rebound reflects a deeper bench of motivated buyers including refunded private equity teams, increased use of securitized financing, and new international entrants all competing for scarce assets,” it added.

In another statement sent to Rigzone back in March, EIR said international upstream mergers and acquisitions remained subdued for a second year, totaling $18 billion in 2025. This was “essentially flat” year over year and “well off the historical annual average of $60 billion”, EIR noted in that statement.

“Limited transactable high-quality resource and lower oil prices in 2025 are factors constraining deal flow,” EIR added.

“Despite subdued activity, select regions including Latin America continued to attract buyers,” it continued.

Dittmar said in that statement, “international M&A is being shaped less by appetite and more by availability”.

“With opportunities to buy into high-quality and scalable development projects scarce, majors have pulled back significantly from the M&A market and focused on organic expansion,” he added.

“Independent and private buyers have stepped in to acquire the mature assets and smaller interests these firms are meanwhile shedding,” he went on to state.

Looking forward, EIR projected in the statement that international upstream M&A “is likely to remain subdued unless additional development stage resource comes to market through farm-downs, partial stake sales or broader portfolio reshaping”.

Regulatory clarity will be a key swing factor, according to EIR, which said jurisdictions that improve fiscal stability, streamline approvals and provide greater certainty around transferability are more likely to convert policy reform into transactions and additional invested capital.

“The recent geopolitical-driven run-up in oil prices has also injected both potential momentum and volatility into the market,” EIR said.

“Higher crude prices improve near-term cash flow to fund M&A and make a wider range of assets economically attractive as acquisition targets,” it added.

“However, price uncertainty can widen bid-ask spreads and lead to a downturn in transactions until stability returns,” it warned.

Dittmar went on to warn in this statement that “the current injection of massive supply uncertainty into crude markets complicates negotiations by widening the bid-ask spread”.

 “That is particularly true in the current market, where the duration of supply disruptions and longer-term impact on crude is opaque,” he added.

“But if higher prices prove durable it will cause a resurgence of interest in expanding global supply, unlocking more development projects and broadening buyer appetite. That ultimately supports stronger and more sustained deal flow,” Dittmar continued.

Rystad Energy noted, in a market update sent to Rigzone earlier this year, that global upstream M&A activity is expected to be lower in 2026 than in 2025.

Rystad highlighted in this update that, according to its analysis, “nearly $152 billion worth of opportunities [are] on the market as of January this year”. The company added that “timing and execution will determine whether several mega deals will go through, with numerous high value assets still on the market waiting for the right buyers”.

According to a chart included in the Rystad update, which showed annual upstream M&A activity by continent and deal count, global upstream M&A deal value came in at $170 billion in 2025, $204 billion in 2024, $255 billion in 2023, $152 billion in 2022, $184 billion in 2021, $103 billion in 2020, and $154 billion in 2019.

This chart highlighted that it excluded “government mandated deals and production sharing contract awards/expiry”.

Rystad noted in its update that global upstream M&A activity “dipped 17 percent year on year to approximately $170 billion in 2025, with deal count decreasing 12 percent to 466”.

“Consolidation within North American shale plays, LNG investments across U.S. and Argentina, and majors’ spinning off assets in Asia and the UK to form new regional joint ventures emerged as key themes last year,” Rystad said in the update.

To contact the author, email andreas.exarheas@rigzone.com