Enverus: Expect Hot Oil & Gas M&A Market To Slow In 2021

Enverus: Expect Hot Oil & Gas M&A Market To Slow In 2021

A pump jack operates on April 23, 2020 Eddy County, New Mexico. (Photo by Paul Ratje / AFP) (Photo ... [+] by PAUL RATJE/AFP via Getty Images)



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A new mergers and acquisitions report from analyst firm Enverus projects that the hot M&A market the oil and gas industry experienced during the second half of 2020 will likely slow considerably in 2021. The ability to use such deals to drive down costs and increase efficiencies through economies of scale is especially attractive to investors, as is the recent focus of acquiring companies on increasing their respective footprint in the oil-rich Permian Basin.

Indeed, Enverus's report finds that the greater Permian Region - including the Midland Basin to the east and Delaware Basin to the west - accounted for fully 83% of the value of deals made during the fourth quarter. That is hardly surprising given that the Permian has consistently been home to roughly half of all the nation's active drilling rigs for almost a decade now. With natural gas prices remaining stuck in a narrow, low trading range, the focus remains on crude oil and other liquids, and the Permian