Merger Mania Drives 2020 Upstream M&A Resurgence

AUSTIN, Texas, Jan. 6, 2021 /PRNewswire/ -- Enverus, the leading energy SaaS and data analytics company, is releasing its summary of Q4 and Full Year 2020 U.S. upstream M&A. After an anemic start, 2020 upstream M&A accelerated dramatically in the second half of the year. Activity crested in Q4 with $27 billion, the third most active quarter by value since oil prices lost their footing in late 2014.

"As anticipated, additional merger activity during Q4 centered on E&Ps with high quality lands and reasonable debt loads," said Enverus M&A Analyst Andrew Dittmar.

Consistent with earlier deals in 2020, all the big Q4 public company corporate deals were all-equity, low-premium combinations. "Wall Street appears supportive of E&P deals, but with very specific expectations on deal structure and the quality of the merger target," added Dittmar.

While big corporate deals lifted M&A value in 2020, deal flow as measured by the number of announced deals fell to historic lows. There were only 140 announced deals with a reported value in 2020, the lowest annual total since at least 2006.

"There was very little appetite for buying upstream assets in 2020," said Dittmar. "In particular, companies were unwilling to invest substantially in buying undeveloped land, a staple of past upstream deal markets."

In 2021, upstream M&A is likely to normalize relative to the boom-and-bust cycle of large corporate deals or nothing during 2020. There is a substantial backlog of non-core asset divestments for companies to pursue.

Corporate consolidation is likely to continue as companies look for synergies to drive down their cost structures. However, there may be fewer very large corporate deals because so many of those were accomplished during the last year, winnowing the list of possible participants.

View Enverus' full announcement including extended commentary and Top Five Deal Table.

About Enverus

Through its SaaS platform, Enverus is the leading data, software and insights company providing innovative technologies and predictive/prescriptive analytics, empowering customers to navigate the future. Enverus' solutions deliver value to more than 6,000 customers in 50 countries across the upstream, midstream and downstream sectors, enabling the industry to be more collaborative, efficient and competitive. Enverus is a portfolio company of Genstar Capital. Creating the future of energy together. Learn more at www.enverus.com.

SOURCE Enverus