Post-election oil deals: smaller, private, and spread out

The era of mega-deals in the Permian Basin is giving way to smaller, more tactical acquisitions as prime acreage becomes increasingly consolidated. The continuation of increasingly small and complex deals comes despite the hope for a broader M&A wave with a more acquisition friendly FTC set to be installed in the Spring.

With core positions now held by majors following deals like ExxonMobil's $60 billion Pioneer purchase and Diamondback's $26 billion Endeavor acquisition, companies are shifting to what Enverus' Daniel Romero calls "singles and doubles" rather than transformative acquisitions, noting operators must now piece together multiple smaller deals to build meaningful inventory.

Private equity is staging a dramatic return to oil and gas investments, with October seeing nearly $20 billion in new funding announcements. EnCap Investments and Quantum Energy Partners each raised flagship funds exceeding $5 billion, with family offices – particularly European ones – stepping in to replace institutional investors who have exited the sector. 

This shift in capital sources is reshaping deal structures, with private operators like FourPoint Resources and Anschutz Exploration emerging as significant buyers.

The geographical focus of upstream M&A is diversifying beyond the Permian as operators seek value in emerging plays. "Intrepid operators" are actively exploring Utah's Uinta play, where SM Energy recently acquired XCL Resources for $2.1 billion, the Midcontinent's Cherokee oil play, Ohio's Utica oil window, Wyoming's Powder River Basin, and South Texas's Pearsall Shale. According to Jefferies' Pete Bowden, early well results from these regions are showing competitive returns compared to the Permian, driving this geographical expansion.