US oil and gas M&A roars in 2024, hitting $206.6bn
Aug 20, 2025
US oil and gas mergers and acquisitions roared back to life in 2024, with deal value more than tripling year-on-year. Transactions totaled $206.6 billion, up from just $47.9 billion in 2023, according to data highlighted by EY and other industry trackers.
That surge reflected a clear strategic shift: rather than funneling record profits into dividends and buybacks, companies reinvested in scale. Exxon Mobil epitomised this approach, completing its $60 billion acquisition of Pioneer Natural Resources in May and pushing its total deal value to $84.5 billion for the year.
Shifting priorities behind the deals
This boom came at a time when companies were rebalancing capital priorities. Shareholder distributions fell by a quarter to $29.2 billion, while exploration and development spending slid 7% to $85.5 billion.
Sector profits also softened, dropping 10% to $74.8 billion as commodity prices retreated. Even so, the appetite for consolidation was clear. The number of publicly traded upstream firms contracted from 50 to 40 in 2024, with those remaining producers accounting for roughly 41% of US oil and gas output. EY notes that integration costs in energy are relatively low — around 3.5% of target revenue — making it easier for firms to execute large-scale transactions compared to industries such as technology or health care.
Momentum stalls in 2025
The momentum that defined 2024 has cooled in 2025. In the first quarter, deal activity totaled $17 billion, bolstered largely by Diamondback Energy’s transactions. By the second quarter, however, the market slowed sharply.
Total deal value fell to $13.5 billion, a 21% decline from the prior quarter and nearly 60% lower than the first half of 2024. Only two transactions, EOG Resources’ $5.6 billion purchase of Encino Acquisition Partners in Ohio’s Utica shale and a royalty acquisition by Viper Energy, accounted for more than three-quarters of the total.
Analysts describe the current landscape as a standoff: buyers, wary of overpaying in a weaker price environment, are holding back, while sellers of high-quality assets remain reluctant to accept lower valuations.
The push towards diversification
Strategic diversification is one theme still shaping deals in 2025. EOG’s acquisition of Encino highlights growing interest in natural gas, particularly in basins linked to future LNG export capacity.
The move is expected to lift the company’s 2025 EBITDA by 10% and boost cash flow by 9%. EY expects this type of repositioning to spread across the sector.
Upstream companies will continue consolidating to secure reserves, international oil majors are likely to expand in both hydrocarbons and low-carbon technologies such as carbon capture, and midstream players may pursue vertical integration. Oilfield services firms, meanwhile, could benefit from a projected 9% rise in capital spending this year.
Why it matters
The oil and gas industry’s consolidation drive is reshaping its structure. After a year of record dealmaking in 2024, the sector in 2025 is moving more cautiously, balancing the need for scale against the realities of lower prices and investor scrutiny.
The long-term story is clear: fewer, larger, and more diversified players will dominate the market, positioning themselves not just for today’s production but for an energy future where natural gas and cleaner technologies are central to strategy.
