A new report from Enverus (formerly DrillingInfo) shows that mergers and acquisitions activity within the oil and gas industry crashed during the first quarter along with the price for crude oil. The report details just $770 million in domestic M&A activity, less than 1/10th of the average quarterly activity seen in the industry over the previous ten years.
“Even before oil prices collapsed on COVID-related demand issues and the surge in global production led by Saudi Arabia, M&A markets were highly challenged,” commented Enverus Senior M&A Analyst Andrew Dittmar. “Responding to Wall Street pressures, E&Ps had slashed spending and refocused from growth to cash flow dampening the appetite for acquisitions.”
The largest dollar transaction Enverus was able to track for Q1 was a deal by Alpine Energy Capital to purchase assets in the Midland Basin from Approach Resources for $193 million. Otherwise, the report details just four other deals totaling $577 million.