International oil and gas M&A continues to heat up—what will be the next hotspot?

Trend Three: Regional charging infrastructure assets face sustained consolidation demand. International oil companies’ (IOCs) push to capture regional markets has led to an increase in medium- and small-scale M&A transactions. The robust growth of new-energy vehicles continues to attract IOCs’ attention and investment into charging infrastructure and related service markets. In recent years, IOCs have actively entered regional charging infrastructure service markets in Europe, the United States, and China. Notably, European IOCs—including Shell, BP, and TotalEnergies—have significantly ramped up their investments in China’s charging infrastructure service market. Leveraging their advantages in retail fuel station networks and driven by energy transition imperatives, IOCs are expected in 2024 to expand globally into new-energy vehicle charging services—through M&A and other means—progressing systematically from premium markets to mainstream markets and then to lower-tier markets. Trend Four: A core-asset-focused strategy will prevail; M&A and divestitures in non-fossil energy businesses will become routine. In 2024 and beyond, IOCs will further concentrate on business areas they know well and those capable of delivering short-term returns, prioritizing investments and acquisitions in sectors that synergize with their core assets. Concurrently, IOCs will evaluate previously acquired non-fossil energy assets and energy service businesses—and selectively divest them. Asset and equity sales or purchases involving electricity retailing, retail formats, and similar businesses will inevitably become hot topics in the international energy M&A market. Trend Five: Metal and mineral resource M&A may also emerge as a market focus. With ExxonMobil’s entry into lithium metal mining in 2023 and its formal launch of a lithium commercial strategy, the door has officially opened for IOCs to enter the metal and mineral resources sector. It is highly probable that IOCs will enter this field via M&A. Six Key Features of the 2023 International Oil & Gas M&A Market Feature One: Concentrated occurrence of mega oil & gas mergers. On October 11, 2023, ExxonMobil announced its acquisition of shale oil and gas producer Pioneer Natural Resources Company; including assumed net debt, the total transaction value reached $64.5 billion. On October 23, Chevron announced its acquisition of independent oil company Hess Corporation; factoring in assumed debt, the total transaction value amounted to $60 billion. These two deals ranked as the largest global M&A transactions so far this year. Looking across the history of global oil & gas M&A, only three prior deals exceeded $60 billion: Exxon’s acquisition of Mobil in 1998 ($91 billion), Shell’s acquisition of BG Group in 2015 ($87 billion), and Total’s acquisition of French oil company Elf Aquitaine in 1999 ($63 billion). The two U.S.-based oil & gas M&A deals in 2023 thus rank as the third- and fifth-largest oil & gas mega-mergers ever recorded. This renewed concentration of mega-M&A transactions will intensify competition among U.S. oil companies, reshape the U.S. oil & gas industry, and trigger a broader wave of international oil & gas M&A. Feature Two: North American IOCs act comprehensively—and show stronger preference for fossil-fuel assets. It is evident that the M&A activities of the two major North American IOCs span multiple energy types and include some renewable-energy-related acquisitions. Yet their primary targets remain fossil-fuel assets—especially shale oil & gas assets located within the United States.

As producers seek new drilling sites, the U.S. shale oil acquisition boom matures.

As oil and gas producers shift toward transactions to secure new drilling locations, the acquisition boom in the U.S. energy sector has matured. Industry experts say companies are pursuing expansion and consolidation—particularly in Texas and New Mexico’s Permian Basin, the largest and highest-producing oilfield in the United States. Consolidation brings several benefits, including expanded wellpad footprints and scale-driven supply advantages, which can strengthen companies’ bargaining power with suppliers. Pete Bowden, Global Head of Industrial, Energy & Infrastructure Banking at Jefferies Financial Group Inc., stated: “The world needs more U.S. oil, and there are still thousands of high-quality locations in the Permian Basin. If you’re a major oil company, you must secure access to these reserves—even amid abundant oil supply.” Consolidation of oilfields may further slow production growth in the Permian Basin. Companies are acquiring competitors primarily to secure future drilling locations—not to immediately boost output. They frequently retire drilling rigs upon closing deals, slowing production growth and potentially exerting upward pressure on oil prices. McKinsey & Co. wrote in February that North American oil and gas transactions this year could total up to $230 billion—ending three years of subdued activity. Energy companies have announced $25 billion in deals so far this year, led by Ovintiv Inc.’s agreement earlier this month to acquire Permian assets from EnCap Investments for approximately $4.3 billion. According to The Wall Street Journal, ExxonMobil has held preliminary talks with Pioneer Natural Resources Co.—one of the largest Permian operators, with a market capitalization of roughly $53 billion. Rystad Energy notes that an Exxon–Pioneer deal would be the largest corporate energy transaction since Shell’s major acquisition of BG Group in 2015. Other drillers are testing the thriving transaction market. Bloomberg reported that Diamondback Energy Inc. is working with a financial advisor to sell non-core assets in the western Permian Basin. Meanwhile, according to sources familiar with the matter—who requested anonymity due to the private nature of the discussions—NGP Energy Capital Management is seeking buyers for Tap Rock Resources LLC and Hibernia Resources, two Permian-focused oil producers. Reuters first reported their sale efforts. The NGP process illustrates another driver behind such transactions: private equity firms, when raising new funds and deploying capital, need to divest assets. Representatives of NGP, Tap Rock, and Hibernia did not respond to requests for comment.

Ovintiv to Buy Logan Energy for $890 Million, Expanding Montney Oil Position

16 hours ago

Ovintiv agreed to acquire Logan Energy for $890 million, adding 266,000 net acres and 20,000 barrels per day in the Montney region with projected $60 million annual cost synergies.

reuters

2026-10-26

Ovintiv to Buy Logan Energy for $890 Million, Expanding Montney Oil Position

Ovintiv to Buy Logan Energy for $890 Million, Expanding Montney Oil Position

FAQ