How Did USA Upstream M&A Activity Look in 2Q 2026?
by Andreas Exarheas | Rigzone Staff
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Enverus Intelligence Research announced that U.S. upstream merger and acquisition activity slowed in the second quarter.
In a statement sent to Rigzone by Enverus this week, the company’s subsidiary, Enverus Intelligence Research (EIR), announced that U.S. upstream merger and acquisition activity slowed to $9.1 billion in the second quarter “amid crude volatility”.
“U.S. upstream deal value fell to $9.1 billion in the second quarter, the third-lowest quarterly total since 2020,” EIR said in the statement.
“The result marked a 76 percent decline quarter on quarter, with value in the first quarter of the year inflated by Devon Energy’s merger with Coterra Energy, and a 33 percent drop from a year ago,” EIR added.
The company highlighted in the statement that more than 40 percent of second quarter value came from a single event – the Bureau of Land Management’s “record-setting New Mexico lease sale”, which EIR pointed out brought in over $4 billion and “shattered the prior auction record of $972 million set in 2018”.
In a statement posted on its website on May 20, the U.S. Department of the Interior (DOI) announced that it had generated over $4 billion in total receipts from a Bureau of Land Management oil and gas lease sale in New Mexico and Texas, “underscoring strong industry demand for domestic energy development on public lands”.
The Bureau of Land Management leased 74 parcels totaling 33,530 acres during the quarterly lease sale, that statement revealed, adding that combined bonus bids and rental payments from the sale totaled approximately $4,007,944,870.
“The quarter looks weak on the headline number, but that understates the strength of the underlying bid for inventory,” EIR Principal Analyst Andrew Dittmar said in the EIR statement.
“Crude volatility tied to the Iran conflict and a softening gas outlook likely widened the bid-ask spread and complicated valuations, which pushed announced value to one of its lowest quarterly totals in years,” he added.
“We view that as a temporary negotiation obstacle rather than a demand problem,” he continued.
“Public companies are willing to pay ever-higher prices for tier-one Permian acreage and buyers deploying asset-backed securitization capital are still very much in the market,” Dittmar went on to state.
A table accompanying the statement showed that the top five U.S. upstream deals of the second quarter of 2026 comprised a deal between Devon and the Bureau of Land Management valued at $2.6 billion, a deal between Talos Energy/Ridgewood and Shell worth $1.7 billion, a deal between Diversified Energy and Camino Natural Resources worth $1.175 billion, a deal between Matador Resources and the Bureau of Land Management valued at $1.1 billion, and a deal between Jonah Energy/multiple buyers and Scout Energy Partners valued at $1.0 billion.
Public, Private Companies
Public companies dominated acquisition activity in the second quarter, EIR highlighted in its statement.
“They led the bidding in the BLM lease sale, where Devon Energy and Matador Resources paid record-setting pricing for Permian locations,” the company noted.
“Additionally, Diversified Energy, in partnership with Carlyle, acquired the majority of Camino Natural Resources in the Anadarko Basin and Talos Energy extended its rollup of mature Gulf of Mexico assets,” it added.
The appetite for assets from private buyers was also strong, EIR pointed out.
“The two principal private ABS-fueled buyers, Flywheel Energy and Jonah Energy, remain serial acquirers. Jonah deployed fresh capital into the Mid-Continent with its $1 billion purchase from Scout Energy Partners,” it said.
“ABS buyers accounted for nearly 30 percent of asset-level deal flow, the second straight quarter at that level, and over the last twelve months they have absorbed roughly $10 billion in assets,” it added.
“Bids from ABS capital have lifted pricing on formerly discounted production-heavy positions and turned the Anadarko Basin into a leading region for M&A, with more than $5 billion transacting there year to date, after years as a dealmaking backwater,” it continued.
In the statement, Dittmar said ABS buyers have become the marginal bid for most production-heavy offerings and highlighted that this has “changed the map”.
“Assets that once traded at a discount because they were inventory-light are now competitively sought after, and the Mid-Continent is a clear beneficiary,” he said.
“We expect this structure has near-term staying power and will expand geographically. The DJ and Williston basins look primed for ABS deployment, given their mature profiles and constrained public-buyer pools, as the structure expands to include more oil-weighted positions,” he continued.
Scarcity Driving Competition
For buyers seeking quality oil-weighted drilling locations, the story remains scarcity driving high competition for assets, EIR said in its statement.
“Nowhere is that more notable than the Permian, where the BLM auction set records for inventory pricing,” it highlighted.
“While unique factors like lower royalty burdens, untouched acreage, and the ability to cherry-pick parcels contributed to the BLM’s record pricing relative to past deals, it wasn’t a one-off occasion,” it added.
“After the sale, EnCap Investment’s Paloma Permian garnered a premium compared to the last few years of Permian deal activity in its July sale to Matador for $1.3 billion,” it said.
“Outside the Permian, Eagle Ford inventory is catching a bid with WildFire Energy selling for just over $4 billion to Magnolia Oil & Gas,” it continued.
Dittmar noted that the jump in Permian pricing did not stay contained to one auction “with a scarcity of opportunities and higher oil pushing already lofty valuations for core locations higher”.
“The latest data points reset the anchor for every private Permian operator with exposure to tier one inventory,” he noted.
Dittmar went on to reveal that EIR expects recent pricing to pull more private companies into the market.
“Likewise, Magnolia’s purchase of WildFire is an endorsement of public company demand for inventory in the Eagle Ford and similarly a strong print in that sale should motivate more sellers,” he said.
While Lower 48 inventory pricing climbs higher, the Montney still offers a cheaper alternative for high-quality locations, according to EIR.
“That is what Shell capitalized on in its $16.4 billion purchase of Canadian producer ARC Resources in April,” it pointed out.
“The deal was enough to drive total Canadian announced deal value above what was recorded in the U.S. during the second quarter, a rare occurrence,” it added.
“Consolidation and deal making potential remains in the Canadian oil patch, both among domestic producers and drawing in global companies like Shell that are betting on the depth of Canada’s resource base and an improving infrastructure outlook,” it continued.
Gas-Directed M&A
Gas-directed M&A struggled in the second quarter, according to EIR.
“Near-term fundamentals deteriorated for the commodity and the Haynesville, the principal target for international buyers, has run short of available packages,” EIR warned in the statement.
“The biggest gas-weighted deal that did clear in the second quarter, Diversified’s Camino acquisition, sat outside the Haynesville in a gassier portion of the SCOOP/STACK,” it added.
“Opportunities in the Anadarko Basin, Eagle Ford, and Rocky Mountains are likely to offer more buyer-friendly pricing than the crowded Haynesville market,” it continued.
Dittmar noted in the statement that the “near-term pause” in gas deals “is about price and a lack of targets, not a lack of interest”.
“The longer-term demand case from LNG is intact. We ultimately expect more international capital to invest in U.S. gas production,” he said.
Deal Flow
EIR said in its statement that non-core divestitures by public companies “remain topical”.
“Strong valuations in asset markets for undeveloped inventory relative to where equity markets sit strengthen the case for pruning non-core positions,” it noted.
“However, that is balanced against overarching concerns around resource scarcity plus healthy balance sheets and free cash flow profiles that dampen pressure to trim portfolios,” it said.
In the statement, EIR predicted that, overall, deal flow is likely to accelerate in the back half of the year.
“A general reset of oil prices higher is motivating private operators to bring assets to market to capture attractive pricing, and public buyers are entering the period with improved free-cash flow profiles and stronger equity currency,” it said.
Dittmar noted in the statement that “higher crude is supercharging both the private sellers coming to market and public company appetite for inventory”.
“We expect a much busier second half, with private companies as the primary source of assets and public buyers and ABS capital as the two active bidding groups,” he concluded.
1Q USA Upstream M&A Activity
In a statement sent to Rigzone earlier this year, EIR revealed that U.S. upstream mergers and acquisitions hit $38 billion in the first quarter of this year before volatility “pause[d]… the market”.
EIR outlined in that statement, however, that this “volatility driven slowdown” was expected to reverse and projected that higher oil prices were 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 that 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 that 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 continued to evolve, adding that asset-backed securitization financing was playing a growing role in production-weighted acquisitions.
2Q 2025 USA Upstream M&A Activity
In a statement sent to Rigzone last year, EIR outlined that U.S. upstream M&A decelerated in the second quarter of 2025, adding that value fell 21 percent quarter over quarter to $13.5 billion.
“That is the second lowest quarterly deal value since the start of 2024 and placed 1H25 M&A value at $30.5 billion, a 60 percent drop compared to the first half of 2024,” EIR said in that statement.
“Value was heavily driven by just two large transactions – EOG’s purchase of Encino Acquisition Partners in the Utica and Viper Energy Partners’ rare public mineral merger with Sitio Royalties,” it added.
“Combined, these two transactions accounted for over 75 percent of second quarter deal value. The lack of breadth in deal markets was reflected in the count of transactions over $100 million with just eight deals topping that benchmark, a tie for the lowest total since 2020,” EIR went on to state.
A table of the top five U.S. upstream deals of the second quarter, which was included in this EIR statement, showed the EOG – Encino deal at the top with a deal value of $5.6 billion, followed by the Viper Energy Partners – Sitio Royalties deal with a value of $4.06 billion. An EQT – Olympus Energy property deal was ranked third in the table, with a value of $1.8 billion, a Permian Resources – APA property deal was ranked fourth, with a value of $608 million, and a TXO/North Hudson – White Rock Energy property deal was ranked fifth, with a value of $475 million.
by Andreas Exarheas | Rigzone Staff
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas