After being knocked off course by oil-price volatility in the wake of the Middle East war, US oil and gas dealmaking is poised to regain momentum, as more private firms look to go to market and corporate consolidation continues.
The pace of upstream mergers and acquisitions (M&A) slowed in March after the conflict sent crude prices soaring above $100/bl. Even so, overall deal value still came in at $38bn for the first three months of 2026 — the most in two years, according to energy consultancy Enverus.
Such slowdowns spurred by fluctuating crude prices are often followed by a recovery as markets stabilise. And competition for increasingly scarce shale inventory is likely to spur a scramble from interested buyers this time around.
"We are likely heading into another tsunami of consolidation," Enverus principal analyst Andrew Dittmar says. "Combined with strong appetite from private capital — both asset-backed securitisation (ABS) and traditional private equity — this sets up the market for a very busy rest of the year."
US independent Devon Energy's $21.5bn takeover of Coterra Energy, which closed earlier this month, dominated transactions in January-March. The deal created one of the biggest shale operators and boosted Devon's position in the Delaware portion of the Permian basin of west Texas and southeast New Mexico.
Permian Resources notes that the year was shaping up to be a busy one rightfrom the start in terms of asset sales in the Delaware, and that this has not changed. "We are certainly well positioned to take advantage of that at the right price," co-chief executive officer James Walter says.
However, leading shale producer Diamondback Energy says it may be difficult to get deals over the line, given current market volatility. "M&A is probably quiet at Diamondback for the foreseeable future," chief executive Kaes Van't Hof says.
Enverus reported only eight transactions above $100mn in the first quarter, equaling a post-2020 low, with deal flow hit by the Iran war.
Easy as ABS?
The growing popularity of ABS — whereby companies raise upfront financing by issuing bonds backed by cash flows from producing assets — is a noteworthy dealmaking trend. Enverus cited Ovintiv's $3bn sale of Anadarko basin assets to Flywheel Energy, a buyer that has been linked to ABS financing in the past.
Earlier this month, Diversified Energy joined investment firm Carlyle to acquire assets in Oklahoma from Camino Natural Resources for $1.2bn. The deal will be financed through ABS arranged by Carlyle. A special-purpose vehicle will hold the producing assets and issue debt backed by underlying cash flows.
International capital also remained a strong presence in the quarter, particularly in relation to natural-gas weighted areas and proximity to US Gulf coast export terminals. One such example came with Japanese trading house Mitsubishi's $7.6bn purchase of Aethon Energy's shale assets in Texas and Louisiana.
Outside the US, Shell sought to double down on its long-term production footprint with its recent $13.6bn acquisition of Canada's ARC Resources in the European major's biggest acquisition since that of BG Group in 2015.
For now, higher oil prices should mean more private exploration and production firms bringing more assets to market, including a dwindling number of Permian targets. The rally will also make mature plays such as the Eagle Ford and Williston basins more economic to develop. And recent acquirers that have taken part in large-scale M&A are likely to take advantage of higher prices to trim their portfolios by ditching non-core assets. "The case for higher-for-longer oil prices is strengthening and creating the set-up for an M&A rebound," Enverus' Dittmar argues.
