US upstream oil and gas dealmaking hit two-year high in Q1 2026

By Georgina McCartney

HOUSTON, May 13 (Reuters) – Dealmaking in the U.S. upstream oil and gas sector jumped to $38 billion in the first quarter of this year, marking the highest quarterly total in two years, analytics firm Enverus said on Wednesday. 

Shale producer Devon and smaller rival Coterra closed on their merger last week after announcing plans to combine in February. That deal was valued at $25 billion and took the lion’s share of Q1 dealmaking. 

Both companies operate across multiple shale formations, with both present in the Delaware portion of the Permian Basin in Texas and New Mexico and Oklahoma’s Anadarko Basin.

Dealmaking slowed sharply in March as crude price volatility surged following U.S.-Israeli strikes on Iran in February that triggered a broader Middle East conflict and disrupted shipping through the Strait of Hormuz.

Since the start of the war on February 28, global benchmark Brent crude futures have swung from a low of $77.74 a barrel to a high of $118.35. 

However, higher oil prices will likely set the stage for a rebound in dealmaking by enabling more private exploration and production companies to pursue sales while supporting continued consolidation, Enverus said. 

“The market entered a temporary holding pattern as volatility clouded the outlook for oil prices, but the case for higher-for-longer oil prices is strengthening and creating the setup for an M&A rebound,” said Andrew Dittmar, principal analyst at Enverus Intelligence Research.

“We are likely heading into another tsunami of consolidation as higher oil prices supercharge both private companies going to market and public E&P appetite for deals, both corporate consolidation and private asset sales,” he added. 

Other notable deals included Mitsubishi’s purchase of Aethon Energy for $7.6 billion, marking the Japanese firm’s largest deal yet as it seeks to strengthen its gas supply chain.

(Reporting by Georgina McCartney in Houston; Editing by Sanjeev Miglani)