The value of U.S. oil and gas mergers and acquisitions fell to a 10-year low in the first quarter, according to data released on April 4, as investors pushed shale producers that have driven a recent merger boom to focus on lifting shareholder returns rather than production.

The value of oil and gas deals tumbled plunged 93%  to $1.6 billion last quarter from a year ago to the lowest in a decade, energy consultancy Drillinginfo said in its quarterly M&A review.

Investors have urged independent shale producers to stop spending on acreage and on corporate dealmaking and return cash to shareholders through dividends and share buybacks.

Just seven of 29 independent shale producers last year generated more cash from operations than they spent on drilling and dividends, a Reuters review of financial filings revealed.

"The market for upstream deals came to a halt in late 2018 with the combined pullback in oil prices and equities," said Andrew Dittmar, a Drillinginfo M&A analyst. By comparison, there were $82 billion in oil and gas deals last year, a four-year high, he said.

So few oil and gas producers have delivered strong returns that the energy industry has lost favor. The sector's weighting in the S&P 500 index of large publicly traded U.S. companies fell to 5 percent this year from 11% in 2012.

"They don't want them to spend more money till they show they can make money with the assets they have on hand," Dittmar said.

Deals also have been sidelined as investors refused to accept promises of future operating synergies, insisting that any asset purchases must already be generating significant cash flow.

Investor opposition last month pushed Denbury Resources Inc. and shale producer Penn Virginia Corp. to call off their $1.7 billion merger. Denbury also cited "difficult market conditions" for canceling the combination.

An investor who put $100 into the S&P 500 Oil & Gas Exploration & Production Index in 2013 would have had $58.99 at the end of 2018. Similar $100 investments were worth just $9 in Whiting Petroleum Corp, $33.51 in Apache Corp and $38.88 in Devon Energy Corp, according to financial filings.

Both the shares of oil and gas producers and oil prices have rebounded somewhat since the end of last year by 15 percent and 20 percent, respectively, offering hope for deal talks later this year, Dittmar said.

"It's that Wall Street pressure that is pushing deal values down," he said.

Onshore