After an anemic start, E&Ps raced to announce corporate combinations in the second half of 2020, providing a well-needed boost to the year’s deal value, according to an Enverus report published Jan. 6.

However, the late year wave of industry consolidation wasn’t enough to save a dismal year of A&D activity, which Enverus said is likely to continue into the New Year thanks to the uncertainty created by the ongoing COVID-19 pandemic. While big corporate combinations lifted M&A value to $52 billion, deal flow for 2020, as measured by the firm as announced deals, fell to historic lows.

“There was very little appetite on either the public or private company side for buying upstream assets in 2020 as preserving cash to pay down debt or return to equity owners was prioritized,” Enverus M&A Analyst Andrew Dittmar said in the report. “In particular, companies were unwilling to invest substantially in buying undeveloped land, a staple of past upstream deal markets.”

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