ICYMI: Upstream M&A slows on pricing gaps while deal appetite holds

Hello, and welcome to Oil & Gas Journal's Re-Enterprised, a podcast surveying the petroleum industry's evolution and reinvention amid the quickly changing energy landscape. I'm OGJ Editor Chris Smith, and in this podcast, across the upstream, midstream, and downstream, upstream, OGJ editors and guests will discuss the ways in which oil and gas companies, alongside their technology licensors and service providers, are transforming traditional ways of doing business to remain competitive in not-so-traditional times.

Thank you, and enjoy the show. Upstream dealmaking slowed this spring, but it didn't stop. According to research and energy intelligence firms Enverus and Reistad Energy, deal values dropped in March as volatility widened the price gap between buyer and seller. But transaction counts held steady, and interest in upstream assets remained strong.

Hi, I'm Michaela Adams, Managing Editor and Content Strategist for Oil & Gas Journal. In this In Case You Missed It episode, I'll take a look at what's happened in the upstream merger and acquisitions market, M&A for short, where capital is still flowing, and what recent activity says about the direction of the market. Not an exhaustive recap, just a through line of important signals with the underlying reports linked in the show notes. Looking back at 2025, the gap between the international markets and the North American market was notable.

According to Enverus Intelligence Research, global upstream M&A outside North America totaled about $18 billion during the year, compared with a historical annual average of roughly $60 billion. In its international M&A review, Enverus principal analyst Andrew Dittmar said that gap was largely driven by a lack of available assets, noting that international M&A is being shaped less by appetite and more by availability, as relatively few large-scale development opportunities came to market.

In the report, released mid-March, the firm said that in that environment, transactions tended to involve mature production, smaller interests, or sellers operating under some degree of pressure. The oil and gas majors stepped back from the international M&A market, while independent and private buyers stepped in. Regionally, Latin America accounted for roughly half of international deal value, mostly from consolidation in Argentina Vacamuerta formation and activity in Brazil If you follow the industry and OGJ you know there has been a lot of time and ink devoted to Argentina in recent months.

In fact, my colleague Alex Prosik recently recorded a podcast episode about the Vaca Muerta with an engineering-eyed view. I'll drop that link in the show notes. Last year's upstream M&A activity in Argentina was notable as it turned out to be the most active since 2014, driven largely by regional operators and independents expanding positions following exits by international oil companies. In Brazil and Africa, larger exploration and production companies worked deals that saw them move out of more mature assets for higher impact prospects.

Across the broader international market, Enverus estimates that since early 2024, more than 70% of acquisition value has come from public independence and private E&P companies rather than majors. In the U.S. in 2025, Upstream Oil and Gas M&A totaled $65 billion, according to the firm's annual review.

Upstream M&A in Canada last year reached $20 billion, driven primarily by scale building and consolidation within the Motney and Duvernay formations. Moving into 2026, the U.S. market appeared to follow an upward trajectory.

In mid-May, Enverus reported that over the last six months, U.S. upstream deal value exceeded $60 billion, reflecting ongoing consolidation among public companies along with continued asset-level transactions. For first quarter 2026, by Enverus calculations, U.

S. upstream deal value landed at about $38 billion, making it the highest quarterly total in two years. A large portion of that value came from a single transaction. Devon Energy and Cotera Energy agreed to merge in a stock deal with transaction equity value of roughly $25 billion.

Other transactions so far this year reflect a mix of strategic repositioning and targeted acquisitions. Anvirus highlighted Mitsubishi's $5.2 billion equity deal to acquire Athan Energy's Haynesville position, along with Flywheel Energy's $3 billion purchase of Anadarko Basin assets from Aventive. Notably, within the first quarter, the world saw the beginning of the Iran War.

Enverus described the market at the time as entering a holding pattern, as the conflict introduced additional uncertainty into oil pricing. Ristat Energy followed the numbers as well. Its monthly data shows how quickly that shift took hold The firm reported upstream deal value fell to billion in March down from billion in February while total transaction count remained relatively steady at around 35 deals. The firm attributed that shift to pricing misalignment.

It described a widening gap between buyer and seller price expectations as volatility increased in oil markets. But even within that slower period, activity re-emerged. Enveris said higher oil prices have supported asset valuations and are increasing the likelihood that private companies bring upstream assets to market as mature plays become more attractive under improved pricing conditions. Kraken Resources acquired Zivana Energy Operating LLC mid-May, expanding its footprint in the Bakken-Williston Basin, while there are reports that Eagleford producer Wildfire Energy is preparing a sale.

Expect continued demand for gas-weighted upstream assets tied to LNG exports along the U.S. Gulf Coast. As noted earlier, Mitsubishi acquired Athon Energy's Haynesville position, adding about 2.

1 billion cubic feet of gas per day across 400,000 acres in Louisiana and East Texas. This reflects a broader trend, with Japanese buyers expanding their presence in the basin, Enverus said, also pointing out that Japanese companies now control more than 4 billion cubic feet per day of Haynesville production, about 30% of total output. The draw, in part, is the basin's proximity to the U.S.

Gulf Coast LNG infrastructure, linking upstream supply to export capacity. There is also renewed activity from larger buyers. Shell signed a deal to acquire Canadian producer ARC Resources for about $16.4 billion, including assumed debt, as a sign that European majors are re-entering the upstream market.

According to Enverus, ARC produces about 374,000 barrels of oil equivalent per day and holds more than 1.5 million net acres in the Motney in Canada. Large-scale consolidation, like that of Devin's acquisition of Cotera, is often followed by divestitures. Companies expand and then look to streamline portfolios over time.

In Devin's case, that process may be in the works. In an updated outlook June 9th, Devin said it is conducting a portfolio review aimed at concentrating its asset base around its core Permian position. CEO Clay Gaspar said optimizing the portfolio remains a top priority and that a complete review of strategic and financial criteria is well underway. Reporting from Reuters described the effort as a broader push to reposition the combined company around its highest margin assets amid investor pressure Of note Devin is scheduled to appear in a fireside chat at JPMorgan Investor Conference the day this episode drops, where investors will likely be looking for more clarity on that portfolio review and whether any divestiture decisions are close.

Besides Devin, companies active in large-scale M&A, including ConocoPhillips and SM Energy, are likely to use the current pricing environment to sell non-core upstream assets, Enveris said, which tends to keep deal activity moving even after larger transactions close. Looking ahead, the data points to markets where both supply and demand for upstream deals remain in place. Last month, Reistad estimated that roughly $95 billion in upstream deal opportunities is on the market globally, with North America accounting for the largest share.

The firm pointed to consolidation among small and mid-cap exploration and production companies, private equity firepower, Montany consolidation, and interest in U.S. LNG and gas-weighted assets as shaping buyer demand. Breaking down its analysis, Enver said it expects international upstream M&A to likely remain subdued unless farm downs, partial stake sales, or portfolio reshaping brings more development stage assets to market, noting too that regulatory clarity is a key concern.

As for U.S. upstream M&A, Enveris said it expects deal activity to follow past patterns of sharp recoveries following periods of volatility-driven slowdowns. As Dittmar noted, higher oil prices are expected to trigger a surge in industry consolidation as private companies go to market and public EMPs pursue more deals.

Along with strong interest from private investors, the market is set up for a very busy rest of the year. If you'd like to read more about the 2025 deals, transactions shaping 2026, or how the Iran war has shaped oil markets over the months, I welcome you to view our news coverage at OGJ.com and OGJ.com backslash Iran war.

Thanks for listening. This has been Oil & Gas Journal's Re-Enterprised, produced by Endeavor Business Media, a division of Endeavor B2B. Thank you for listening. Be sure to subscribe or follow in your favorite podcasting app to get new episodes delivered straight to you.

For more insights and to follow our social accounts, you can visit our website at ogj.com. Join the conversation by letting us know what topics you would like us to cover.