SEATTLE (Oil Monster): The oil and gas industry in the United States is undergoing what analysts at Ernst & Young LLP (EY) call a “seismic transformation” thanks to a wave of mergers and acquisitions.
At the same time, on a global scale, it appears that growing demand and greater supply are in the cards for the oil and gas sector. But uncertainty otherwise reigns.
In its benchmarking study of the U.S. oil and gas sector, EY found that the field of top publicly traded exploration and production companies has shrunk from 50 to just 40. These 40 companies account for about 41% of U.S. oil and gas production, based on 2024 data.
Mergers and acquisitions (M&A) have been energized, with nearly $207 billion in activity last year, up a whopping 331% from 2023, which the EY report notes was driven by megadeals totaling more than $10 billion in value. Analysts say that 42% of the acquired asset value was allocated to unproved properties, compared to just 18% in 2023. This means that companies intend to build future drilling inventory and secure long-term production, EY says.
Capital spent acquiring proved reserves was up 12% last year on an annual basis. Meanwhile, exploration and development costs fell 7% as money shifted to acquisitions.
“While the companies in our study delivered strong results, executed M&A and advanced drilling programs, the focus is shifting,” Herb Listen, lead author of the study and oil and gas assurance partner at EY, said in a press statement. “With ongoing uncertainty around supply and demand, pricing, tariffs and geopolitics, operational efficiency and capital discipline will be critical. The companies that adapt quickly, invest strategically and integrate effectively will define the next chapter of U.S. energy.”
Courtesy: www.advancedmanufacturing.org
