Rystad reports that US oil and gas M&A will reach a record in 2023, with the focus shifting away from Permian.

Analysts at Rystad, a consultancy, said that the appetite of U.S. producers for deals is close to last year's level, as a rise in interest in smaller oilfields offsets sluggish activity in the Permian Basin, which produces most oil.

According to Rystad's analysis of the U.S. market through August, nearly $100 billion was spent on mergers and purchases (M&As) by U.S. producers. Another $46 billion worth of assets is currently up for sale.

Rystad says that a record-breaking $155 billion in production and exploration deals were signed by 2023.

The industry saw a flurry of consolidation last year, as the top oil producers announced mega-deals that would boost their production and reduce their backlog. Private investors have had a rare opportunity to profitably exit their investments.

Raina stated that private equity-backed oil companies are likely to continue to sell assets in order to take advantage of the public companies' appetite to purchase inventory and to secure premium prices as competition increases among potential buyers.

Last year, the rush to close deals was almost entirely focused on the Permian Basin in Texas and New Mexico. However, the intense competition among buyers for the best oilfields in the United States has led opportunistic investors to look elsewhere.

SM Energy said that good deals are becoming harder to come by in the Permian.

Wade Pursell, Chief Financial Officer of SM Energy, said that it was difficult to find an asset of this size at a price that is comparable.

Rystad's analysis shows that deals focused on the Permian accounted for just 46% of first-half totals this year compared to 92% during the second half last year.

Bakken deals in North Dakota increased to 12% during the first half of this year from almost zero in the second. According to Rystad, the Marcellus basin of Pennsylvania accounted for 14%, and the Eagle Ford Basin in Southeast Texas, 13%. Shariq Khan, New York (reporting) Edited by Margueritachoy

(source: Reuters)