Enverus Intelligence Research (EIR), a subsidiary of Enverus, an energy-dedicated software as a service company, has released its summary of the first quarter of 2024 upstream mergers and acquisitions (M&A) activity.
According to an April 23 press release by Enverus, the sale of privately held Endeavor Energy Resources to publicly held Diamondback Energy for $26 billion led the consolidation efforts in Q1. The acquisition was deemed the largest sale of a private company tracked by Enverus. The sale was announced on February 12.
"Endeavor was a unique opportunity to acquire a legacy family-owned E&P with leases in the core of the Midland Basin acquired decades before Diamondback, or many of the other familiar shale names, were even in business," said EIR Principal Analyst Andrew Dittmar in the release.
After a record-breaking $192 billion consolidation in the U.S. upstream sector in 2023, the first quarter of 2024 “would be on track” to exceed that number with the $51 billion in announced deals, according to the release. But EIR is “pumping the brakes” on expectations as deal momentum slowed in March.
"Deals at the start of 2024 were driven by the same factors that led to last year's marathon of mergers, foremost among them a desire to lock up high-quality inventory when it is available," said Dittmar. “Most of that inventory is going to be found in the Permian, so it is unsurprising the prolific basin was yet again the primary driver for M&A within oil and gas."
While the Permian Basin continues to attract attention, companies are exploring M&A opportunities elsewhere, according to the release. The Eagle Ford and SCOOP | STACK are prospects for consolidation with higher fragmentation and lower prices compared to the Permian.
EIR specializes in energy-sector research with a focus on oil, natural gas, power, and renewable industries, according to the release. Its reports cover topics such as asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts.