Merger and acquisition activity in the U.S. upstream oil and gas sector slowed significantly in the second quarter of 2025, as heightened volatility across commodity and equity markets caused investors to hit the brakes. That’s according to a new report released Wednesday by Enverus Intelligence Research.
The slowdown marks a sharp contrast from the blockbuster wave of consolidation seen in recent years. In 2023, the industry logged a record $192 billion in deal value, fueled by a series of high-profile takeovers by oil and gas majors. But momentum has cooled notably since then.
Enverus reported that U.S. upstream deals totaled $13.5 billion during the three months ended June 30. That figure represents a 21 percent decline from the previous quarter. For the first half of 2025, deal value amounted to $30.5 billion, down 60 percent compared with the same period last year.
“Volatility in commodity and equity markets raised a major yellow flag for M&A, slowing the pace of dealmaking,” said Andrew Dittmar, principal analyst at Enverus.
Market Turbulence and Geopolitical Risk Cloud Outlook
The deceleration in deal activity was partly driven by sharp swings in oil prices and investor anxiety over economic and geopolitical developments. U.S. crude futures saw a wide price range in the second quarter, bottoming out at $57.13 per barrel on May 5 and rising to a high of $75.14 by June 18, according to LSEG data.
Much of that volatility was tied to macroeconomic uncertainty. In April, U.S. President Donald Trump introduced a sweeping set of new trade tariffs, triggering fears of an economic slowdown and weaker fuel demand. At the same time, OPEC’s decision to begin unwinding its deep production cuts injected further uncertainty into the supply outlook. Escalating conflict in the Middle East added another layer of risk, pushing traders to reprice crude futures with a heightened geopolitical risk premium.
Deal Activity Concentrated in a Few Large Transactions
Despite the overall pullback, a handful of major transactions kept the quarter from falling further.
In May, Houston-based EOG Resources announced its $5.6 billion acquisition of Encino Acquisition Partners, a significant deal that captured the lion’s share of total activity. The transaction gives EOG a stronger foothold in the Utica Shale, adding scale and low-cost inventory.
That was followed in June by Viper Energy’s $4.1 billion all-stock deal to acquire Sitio Royalties. The combined entity creates one of the largest public mineral and royalty companies in the U.S., consolidating a fragmented corner of the industry.
Together, these two deals accounted for more than 75 percent of total upstream deal value in the second quarter, according to Enverus.
M&A Pipeline Narrows, Cross-Border Moves Likely
The once-red-hot M&A environment may be facing structural headwinds. Many of the most attractive domestic targets have already been acquired, leaving fewer options on the table for strategic buyers.
“The engine of M&A over the last few years has sputtered and stalled, given there are just a few remaining targets,” Dittmar said.
Looking ahead, Enverus expects companies to begin exploring international opportunities. Canadian plays may see more activity, along with emerging basins such as Argentina’s Vaca Muerta shale formation, which has gained traction as a potential growth engine for global upstream portfolios.
As the market recalibrates, the next wave of consolidation may come not from domestic megadeals, but from more strategic, cross-border asset purchases aimed at diversifying risk and securing future production.
