Economic news

US oil, gas M&A activity jumped 57% last year amid industry consolidation

2024.08.20 01:20

By Nicole Jao

NEW YORK (Reuters) – Dealmaking activity in the oil and gas industry increased 57% last year as energy companies boosted development spending, driven by higher cash flows from profits in prior years, according to a report released on Tuesday.

Top energy companies spent $49.2 billion on mergers and acquisitions in 2023, up from $31.4 billion in 2022, according to a report from Ernst & Young. The increase was mainly driven by mega deals among integrated oil and gas companies.

M&A activity is expected to continue this year and into 2025, driven by more mega deals, EY said.

Money spent on tapping oil and gas also increased last year, with exploration and development expenditures growing 28% to $93.1 billion.

The jump in spending on dealmaking and expanding reserves marks a shift in strategy following a years-long focus on shareholder returns over growth, which many firms had employed in a bid to lure back investors who had fled the sector.

Last year, oil and gas companies halved spending on dividends and share repurchases payments to $28.9 billion from a record $57.7 billion in 2022.

The sector-wide consolidation spurred M&A activity, boosting companies’ overall expenditures to $142.3 billion, 36% higher than in 2022.

“We started to see in 2023 a focus to consolidate the positions that operators had,” Bruce On, a partner at EY’s strategy and energy transactions group, said in an interview, noting a shift in strategy to invest in core operations.

Companies flush with cash were focused on driving efficiency through scale and leveraging existing operations, he said.

Their profits fell 55% in 2023 to $83.9 billion, primarily due to lower West Texas Intermediate (WTI) spot prices, the report said.

© Reuters. Oil tanker Sonangol Porto Amboim is docked at the South Texas Gateway terminal in Ingleside, Texas, U.S., May 14, 2023. REUTERS/Arathy Somasekhar/File Photo

Chevron (NYSE:) was the top buyer of properties in 2023 with total property acquisition costs of $10.6 billion, largely due to its $6.3 billion deal to buy Denver-based oil exploration and production company PDC Energy (NASDAQ:), the report said.

Exxon Mobil (NYSE:) completed the $60 billion acquisition of Pioneer Natural Resources (NYSE:) in May this year. In October, Chevron announced an agreement to buy oil producer Hess (NYSE:) for $53 billion. The deal, however, is delayed until at least mid-2025 due to a legal dispute.



Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 105,772.34 3.70%
ethereum
Ethereum (ETH) $ 3,263.35 5.49%
xrp
XRP (XRP) $ 3.12 2.69%
tether
Tether (USDT) $ 1.00 0.03%
solana
Solana (SOL) $ 242.42 6.43%
bnb
BNB (BNB) $ 680.92 2.53%
usd-coin
USDC (USDC) $ 1.00 0.00%
dogecoin
Dogecoin (DOGE) $ 0.334399 3.23%
cardano
Cardano (ADA) $ 0.977023 6.30%
staked-ether
Lido Staked Ether (STETH) $ 3,257.18 5.26%
tron
TRON (TRX) $ 0.250791 5.31%
chainlink
Chainlink (LINK) $ 24.93 9.91%
avalanche-2
Avalanche (AVAX) $ 34.34 5.46%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 105,096.16 3.30%
stellar
Stellar (XLM) $ 0.434724 11.10%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,880.63 5.22%
sui
Sui (SUI) $ 4.14 12.51%
hedera-hashgraph
Hedera (HBAR) $ 0.319336 5.75%
the-open-network
Toncoin (TON) $ 4.82 0.32%
shiba-inu
Shiba Inu (SHIB) $ 0.000019 4.19%
litecoin
Litecoin (LTC) $ 130.11 17.06%
weth
WETH (WETH) $ 3,264.77 5.49%
polkadot
Polkadot (DOT) $ 6.17 9.63%
hyperliquid
Hyperliquid (HYPE) $ 27.13 18.94%
leo-token
LEO Token (LEO) $ 9.75 0.16%
bitcoin-cash
Bitcoin Cash (BCH) $ 436.21 6.49%
bitget-token
Bitget Token (BGB) $ 6.95 3.85%
uniswap
Uniswap (UNI) $ 12.10 4.62%
usds
USDS (USDS) $ 0.999052 0.20%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,452.47 5.32%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.05%
mantra-dao
MANTRA (OM) $ 5.82 28.12%
pepe
Pepe (PEPE) $ 0.000013 6.47%
official-trump
Official Trump (TRUMP) $ 27.59 2.55%
near
NEAR Protocol (NEAR) $ 4.62 5.63%
ondo-finance
Ondo (ONDO) $ 1.59 13.65%
aave
Aave (AAVE) $ 315.37 9.27%
aptos
Aptos (APT) $ 7.89 8.53%
internet-computer
Internet Computer (ICP) $ 9.20 8.56%
monero
Monero (XMR) $ 232.04 4.94%
whitebit
WhiteBIT Coin (WBT) $ 28.41 0.04%
mantle
Mantle (MNT) $ 1.19 11.02%
ethereum-classic
Ethereum Classic (ETC) $ 26.45 5.12%
vechain
VeChain (VET) $ 0.047371 12.03%
bittensor
Bittensor (TAO) $ 466.59 1.95%
crypto-com-chain
Cronos (CRO) $ 0.132686 3.71%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.41673 6.23%
dai
Dai (DAI) $ 0.999981 0.02%
kaspa
Kaspa (KAS) $ 0.132918 9.86%
okb
OKB (OKB) $ 56.26 4.45%