By Mark Jaffe, EUCI energy writer
Oil and gas upstream mergers slumped in the third quarter of 2025, as doggedly low oil prices kept buyers away, with deals dropping to $9.7 billion, making it the third straight quarterly decline, according to Enverus Intelligence Research (EIR).
The year began with a flurry of mergers and acquisitions, but activity quickly cooled, particularly for private equity-backed oil properties. Private equity looking to exit the sector had fueled many deals.
“Crude prices in the mid-$60s or worse have made it tough for sellers, especially private equity firms with oil-weighted assets,” Andrew Dittmar, principal analyst at EIR, said in a statement. “Most remaining shale M&A opportunities need stronger pricing to justify public companies paying for the undeveloped locations.”
Only about 1,800 shale locations held by private equity can deliver a 10% return at $50 a barrel for West Texas Intermediate crude oil, Dittmar said. Another 6,700 require higher prices to hit that benchmark.
“Many firms are holding off on exits, anticipating a more favorable market in 2027 or later,” Dittmar said.
What activity there was came from small and middle market capitalized (SMID-cap) companies and from gas-weighted deals.
As high-quality investors for private equity sellers become scarcer, SMID-cap consolidation is becoming “the obvious strategic path forward for mergers and acquisitions,” Ditmar said.
Crest Energy’s purchase of Vital Energy, in the Permian Basin, was the largest transaction for the quarter at $3 billion. The next biggest deal was Stone Ridge Holdings buying ConocoPhillips assets in the Anadarko Basin for $1.3 billion.
These all-equity combinations accounted for 40% of the quarter’s total value.
“Stock-for-stock swaps should be easier to negotiate in a weak crude environment compared to cash deals, and we expect more low-premium, equity-based deals,” Dittmar said.
Other significant deals included Mach Natural Resources purchase of IKAV’s San Juan Basin assets for $787 million and Berry Petroleum’s $717 million sale to California Resources Corp.
Acquisition of natural gas assets was “a bright spot” for the quarter spurred by the growth in liquified natural gas exports and the increasing demand for electricity by data centers – leading to the expectation of higher natural gas prices.
That trend led to a several deals in the gas-rich Anadarko Basin, which accounted for 20% of the deal value for the quarter, including purchases by TotalEnergies, Stone Ridge Energy and Diversified Energy.
“Natural gas is gaining momentum heading into the fourth quarter of ‘25 and 2026,” Dittmar said. “Interest is broad-based, including international firms and private capital actively pursuing opportunities.”
The Haynesville, another gas play, is also seeing higher prices in part boosted by Asia-based buyers looking for LNG-linked exposure. This activity spilled into the Anadarko and may also reach the Rockies.
As U.S. shale continues toward its late innings, some players are shifting toward optimizing mature assets and extending production life. “Upstream M&A may stay in a slump as low oil prices keep private sellers in the dugout, but SMID-cap consolidation and natural gas deal flow could still deliver extra innings for U.S. oil and gas mergers,” Enverus said.
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