Oil and Gas: M&A Activity Grows in Q4 Despite Global Challenges

From supply chain shortages to decreased demand due to COVID-related travel restrictions, the oil and gas industry has certainly encountered plenty of challenges in recent months. Despite these global challenges, however, mergers and acquisitions (M&A) activity within the oil and gas sector continues to grow, signaling that executives remain optimistic about the future of the industry.

There have been a number of recent and noteworthy examples of M&A activity within the oil and gas industry. So far in Q4 2021, Northern Oil and Gas has purchased a non-operated interest in 400 Bakken wells from Comstock Resources for a total of $154 million, SilverBow Resources has spent $75 million 17,000 net acres in the Eagle Ford from two different sellers, and an undisclosed buyer has spent $100 million purchasing 22,000 net acres in the Eagle Ford from Callon Petroleum. These deals come in the wake of a recent Conoco Phillips-Shell transaction that saw the purchase of 225,000 net acres in the Delaware Basin for $9.5 billion.

With a lot of days left in Q4 2021, M&A activity within the oil and gas industry has already amounted to a total of $47.5 billion, and 2021 is easily on track to become the most active year for oil and gas M&A since 2014. Given all of the challenges that oil and gas companies across the globe have faced over the past year and a half, reaching this benchmark is truly an impressive feat.

While there are still plenty of obstacles for the oil and gas industry to overcome in the coming months, this growing M&A activity indicates that operators are still actively trying to increase their acreage positions, and all indications are that M&A activity within the oil and gas industry will continue to grow throughout the foreseeable future.