$14B in 3Q23 upstream M&A overshadowed by October's $60B+ historic deals

ExxonMobil and Chevron spend $115B combined on oil assets, target emission reductions

CALGARY, AB, Oct. 24, 2023 /PRNewswire/ -- Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, is releasing its summary of 3Q23 upstream merger and acquisition (M&A) activity.

In Q3, U.S. upstream M&A cruised along with $14 billion transacted in 25 deals. A liftoff in corporate consolidation picked up the slack of declining opportunities to buy private assets with two-thirds of deal value last quarter coming from combinations between public companies. That accelerated to historic levels in October with ExxonMobil's $65 billion acquisition of Pioneer Natural Resources in the third-largest upstream deal ever by enterprise value, and Chevron purchasing Hess for $60 billion.

"As anticipated, the pace of consolidation slowed for private E&Ps as the cream of the crop in terms of scale and quality has largely, but not entirely, been bought out," said Andrew Dittmar, senior vice president at EIR. "The next logical step in consolidation is more tie-ups between public producers. That could have slowly built toward a historic deal like ExxonMobil's purchase of Pioneer but instead that happened right out of the gate and could well be the largest deal of the shale era."

"ExxonMobil is committing to its traditional energy business, which has become extremely profitable for the major, while working to decarbonize operations to meet its emissions targets," Dittmar said. "This is coming from a combination of reducing upstream emissions and building its carbon sequestration business."

"By acquiring Pioneer, ExxonMobil is not only expanding its Permian portfolio, but also speeding up the Permian's transition to a low-carbon future. ExxonMobil has set an ambitious goal of achieving net-zero emissions by 2030 for its existing Permian assets and by 2035 for the newly acquired Pioneer asset, which is 15 years ahead of Pioneer's original plan," said John Gutentag, product owner at Enverus.

The moves by ExxonMobil and Chevron are likely to ignite further consolidation among smaller oil and gas companies as they scramble to remain competitive and secure remaining drilling opportunities. Already, reports have emerged of merger talks between large-cap independents that are also likely to go on shopping spree targeting smaller and midsize producers.

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.

SOURCE Enverus