Oil and gas producers’ 2023 merger talks culminated in a $144-billion tsunami of year-end deals, according to Enverus Intelligence Research.

Full-year 2023 deals totaled $192 billion.

Two deals alone represented $125 billion of fourth-quarter and full-year deal value: Pioneer Natural Resources for $65 billion by Exxon Mobil, and Hess Corp. for $60 billion by Chevron Corp.

The bid for Pioneer is the “third largest upstream deal ever by enterprise value,” Enverus reported; the Chevron-Hess deal, the fourth largest.

According to London Stock Exchange Group (LSEG) analysis, the Pioneer deal was the largest announced globally in any sector in 2023. The Hess deal was No. 2.

“Oil and gas is undergoing a historic consolidation wave comparable to what occurred in the late 1990s and early 2000s [that gave rise] to the modern supermajors,” said Andrew Dittmar, Enverus senior vice president.

The acquisitions are “the preferred tool to replace declining reserves and secure longevity in these companies’ profitable upstream businesses,” he added. Also, for top acreage, “there are also now more buyers than sellers, driving prices upward.”

At top in remaining resource is the Permian Basin where Pioneer is a pure-play, “offering both the most high-quality remaining drilling opportunities and the greatest potential for resource expansion,” Enverus reported.

The potential is vertical “from the prolific region’s stacked resource benches.”

Permian deal-making alone was $103 billion of full-year 2023 deal value. Occidental Petroleum made a winning $12-billion bid for Permian pure-play CrownRock LP. The deal is expected to close in this quarter, according to Oxy.

“Buyers increasingly showed a willingness to pay whatever it took to boost their footprint in this critical play, and prices for future drilling inventory climbed to new highs," Dittmar said.

Exxon Mobil’s offer for Pioneer represents $89,500 per flowing boe/d, according to a Hart Energy analysis.

Top 2023 Deals Globally
(Source: London Stock Exchange Group)

2024: To Canada

The number of potential acquisitions “has grown short,” Dittmar added, although “the buyer interest is still there,” thus a 2024 repeat of 2023 activity is unlikely.

Privately-held Midland Basin pure-play Endeavor Energy is at the top of prospective buyers’ take-out targets and “has an excellent chance of generating the largest transaction of 2024,” Dittmar said.

The Hart Energy analysis of Exxon Mobil’s valuation of Pioneer suggests Endeavor could fetch up to $30 billion.

As large reserve-replacement and expansion opportunities diminish onshore the U.S. Lower 48, Enverus reported, “buyers may increasingly look outside the United States for acquisition opportunities.”

The Chevron-Hess deal is one example. While Hess operates in the Bakken Shale in the Williston Basin, Chevron is buying it “largely for its exposure to Guyana,” Enverus reported.

An obvious place to go is Canada, where buyers can find “a large resource base in a developed and stable country.”

The Montney Shale play has some 20 years of Tier 1 inventory remaining at the current drilling pace. It “will likely get some close looks from U.S. companies concerned about the scale and quality of inventory left to buy at home.”


2024 may also come with relatively smaller transactions as a result of post-M&A portfolio pruning, Dittmar said. For example, Occidental plans to divest up to $6 billion of property.

“That should be a welcome development for some of the smaller public E&Ps plus private capital that has been priced out or lacked the scale to compete in the strategic core Permian deals,” Dittmar said.

Plays in the 2024 deal roster may be in Oklahoma in the SCOOP and STACK, in South Texas’ Eagle Ford and in North Dakota’s Bakken. “These plays had just a combined $11 billion of deals in 2023,” Dittmar said.

While private equity has funded some 20 new E&Ps since 2021, “the game has changed for these firms. Rather than buying promising exploratory acreage and hoping to prove it up before selling to a public operator, the firms will likely be looking to buy relatively developed assets cheaply and generate dividends for their private investors,” Enverus reported.

Natural gas

Of the $192 billion of 2023 upstream M&A, $6 billion was gas-weighted property.

Among these, “the largest gas deal wasn’t announced until nearly the end of the year when Tokyo Gas purchased Rockcliff Energy in the Haynesville for $2.7 billion in December 2023.”

Already exceeding 2023 total gas-weighted deal value is the Chesapeake Energy-Southwestern Energy merger announced this month for some $12 billion including SWN's debt.

“There is likely to be increasing interest in gas assets as the long-awaited U.S. LNG ramp nears with the U.S. slated to add 10 Bcf/d of LNG export capacity over the next 36 months,” Enverus reported.

“That should eventually offer relief for producers from low natural gas prices, although they will likely need to be patient. With gas storage filling and production still strong, gas prices through most of 2024 are likely to be as low or lower than the challenged 2023 market.”