Fresh Wave of Shale M&A Is Poised to Reshape Sector, Rystad Says

(Bloomberg) -- Small and medium-sized US oil and gas producers are expected to lead a new wave of shale mergers and acquisitions, according to industry consultant Rystad Energy.

Operators will pursue deals within their smaller-sized peer group, Rystad said in a statement. Shale explorers such as Permian Resources Corp. may emerge as either acquirers or targets, while a tie-up between Coterra Energy Inc. and Ovintiv Inc. would offer an example of a merger of equals, Rystad said. 

“This is likely a shift in strategy due to the scarcity of opportunities and an ever-evolving menu of acquisition options,” Atul Raina, vice president for oil and gas M&A at Rystad, said in the statement.

Permian Resources, Coterra and Ovintiv didn’t immediately respond to requests for comment. 

Rystad’s prediction comes in the wake of more than $450 billion of oil and natural gas deals since the start of 2023. As crude prices slide amid an emerging global supply glut and the best shale drilling locations are tapped, producers are looking to bulk up in order to cut costs and pump larger volumes of oil and gas.

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