Why oil and gas M&A is ‘losing steam’
After a record two years of merger and acquisition activity, things have slowed down
Global oil and gas M&A plummets after record run
After a record two years of merger and acquisition activity in the global oil and gas industry, a slowdown is taking hold.
Deal values in the exploration and production sectors fell by a third to $82bn in the first half of the year, when compared with the same period in 2024. The decline was driven by a sharp drop in activity in North America, where the region’s share of global deal value fell to 51 per cent, down from above 70 per cent a year earlier, according to a new report by Rystad.
The consultancy said the big decline in deal value reflected a “natural pause” in transactions after a more than $200bn splurge in consolidation in the US shale oil sector over the previous two years led by ExxonMobil’s $60bn takeover of Pioneer Natural Resources. Macroeconomic uncertainty linked to the Trump administration’s tariff policies and geopolitical tensions had caused volatility in oil prices and a reduction in M&A activity, Rystad said.
“Upstream M&A is losing steam in 2025 as macroeconomic turbulence widens the gap between buyers and sellers. Oil price swings are stretching negotiations and extending timelines, leaving both parties leery of pulling the trigger on large deals,” said Atul Raina, Rystad’s vice-president of oil and gas research.
A sharp fall in oil prices had led to the cancellation of deals and withdrawal of several sale processes, according to the consultancy. It cites the example of Amplify Energy’s decision to terminate its proposed $306mn acquisition of Rocky Mountain assets from Juniper Capital.
David Rockecharlie, chief executive of Crescent Energy, told investors there was a “dislocation” in M&A markets during a conference call on August 5.
“The punch line is 75 per cent or more of the asset sale processes we saw in the Eagle Ford [shale basin in Texas] were pulled and never transacted as a result of volatility that we saw in the second quarter.”
“So, our view is the market’s functioning right now, and we’re able to get some things done, but there’s just a lot out there in our view that’s still sitting on the sidelines.”
Deal value in Eagle Ford fell by 58 per cent to about $980mn in the first half of the year, compared with the second half of 2024. In the Permian Basin, the largest US oilfield, M&A declined by about a quarter to $6.8bn over the same period. There had been no activity in the Bakken so far in 2025, said Rystad.
Crescent is one of a handful of US shale operators that have clinched multibillion-dollar deals this year. On Tuesday the Houston-based company announced it had agreed a $3.1bn all-stock transaction to buy Vital Energy, which owns acreage in the Permian Basin.
The US is not the only global region to suffer a slowdown in M&A, with Africa, Asia and the Middle East also seeing a reduction in deal value. Increased activity in Oceania, South America and Europe was not enough to offset the overall downturn.
But it's not all doom and gloom for dealmakers. The slowdown in M&A in the US shale oil sector stands in contrast to a rise in gas-focused transactions.
Strong demand for natural gas from liquefied natural gas terminals, as well as forecasts of surging demand for gas-fired power plants to fuel the AI boom, is attracting buyers. Deal value in pivotal US shale gas producing areas, including Marcellus/Utica and the Haynesville/Bossier, surged to $9.1bn in the first half of the year, up from $1.8bn in the second half of 2024, said Rystad.
EOG Resources, Citadel and EQT all announced multibillion-dollar shale gas deals in the first half of 2025.
“Gas deals are up as operators look to gain size and scale to participate in the rush to build new gas fired generation, which is now supported by the federal government,” said Andrew Gillick, a managing director at energy research group, Enverus.
“In the shale oil sector there just aren’t that many companies left to buy after the last two years of aggressive dealmaking. Also, the remaining companies are reticent to sell with where crude prices are today.”