A new data by Drillinginfo, which provides software and data analytic services to the energy industry, shows that U.S. oil and gas mergers and acquisitions soared in the third quarter (3Q) of 2018 to $32 billion, a 250 percent increase from $9.1 billion in 2Q.
The Q3 numbers reflect big upstream deals including BP’s $10.5 billion purchase of BHP Billiton subsidiary Petrohawk Energy Corporation.
According to Drillinginfo, the 3Q’s M&A activity broke all quarterly records dating as far back as 4Q 2012. It’s also 76 percent above the quarterly average of $18.3 billion dating back to 2009.
Speaking on the development, Drillinginfo senior director Brian Lidsky said he expects U.S. M&A activity to continue at a heightened level.
“The industry is regularly reporting record well results across the U.S. shales as it continues to de-risk acreage positions and advance technology,” he said in a release.
“As Wall Street is increasingly discriminating among public companies, the food chain of the big getting bigger is alive and well – shale basin leaders are being rewarded for mastering scale, efficiency and technology. This sets the stage for additional mergers that not only checks all the accretive boxes for the buyer, but also provides sellers upside by joining forces with these leaders.”
He added that “Shale basin consolidation will be a continuing theme supplemented by occasional major new entrants for those few large and global companies who have not yet established a significant shale presence.”
“Private equity and private companies will continue to play a role in deploying carefully calculated risk dollars to fringe areas and benches within established resource plays plus advancing today’s technology to new areas,” he stated.