By Mark Jaffe, EUCI energy writer
U.S. oil and gas mergers and acquisition (M&A) value fell to $9.1 billion in the second quarter of 2026, the third-lowest quarterly total since 2020, as sector volatility due to the Iran war made it difficult to value properties, according to Enverus Intelligence Research.
The deals marked a 76% drop quarter-over-quarter, although the first quarter results were inflated by Devon Energy’s $58 billion merger with Coterra Energy. The 2026 first quarter results also marked a 33% drop from a year earlier.
More than 40% of second-quarter value came from the U.S. Bureau of Land Management’s (BLM) record-setting New Mexico lease sale, which brought in more than $4 billion. The previous auction record of $972 million was set in 2018.
“The quarter looks weak on the headline number, but that understates the strength of the underlying bid for inventory,” Andrew Dittmar, an Enverus principal analyst, said in a statement.
“Crude volatility tied to the Iran conflict and a softening gas outlook likely widened the bid-ask spread and complicated valuations which pushed announced value to one of its lowest quarterly totals in years,” Dittmar said.
Enverus said it is likely “a temporary negotiation obstacle rather than a demand problem.”
“Public companies are willing to pay ever-higher prices for tier-one Permian acreage and buyers deploying asset-backed securitization capital are still very much in the market,” Dittmar said.
Public companies led the bidding in the BLM lease sale. The largest deal was Devon Energy’s $2.6 billion acquisition of BLM leases in the Permian Basin. Matador Resources also spent $1.1 billion for Permian BLM leases.
The federal auction offered “unique factors” – including lower royalty rates, untouched acreage and the ability to cherry-pick parcels – that contributed to the record prices.
Diversified Energy, in partnership with Carlyle, acquired the majority of Camino Natural Resources in the Anadarko Basin for $1.175 billion, and Talos Energy spent $1.7 billion to purchase Shell Gulf of Mexico assets.
“The appetite for assets from private buyers was also strong,” Enverus said. “The two principal private ABS-fueled buyers, Flywheel Energy and Jonah Energy, remain serial acquirers.”
Jonah injected fresh capital into the mid-Continent with its $1 billion purchase from Scout Energy Partners. Asset-backed securitization (ABS) buyers represented almost 30% of asset-level deal flow for the second straight quarter. In the last 12 months, they have acquired about $10 billion in assets.
“ABS buyers have become the marginal bid for most production-heavy offerings, and that has changed the map. Assets that once traded at a discount because they were inventory-light are now competitively sought after,” Dittmar said.
ABS has focused on mid-Continent assets, but those in the Williston Basin, which straddles North Dakota, South Dakota, and Montana, and the Denver-Julesburg Basin in Colorado could also be prime targets “given their mature profiles and constrained public-buyer pools,” Enverus said.
While the BLM Permian Basin auction led the M&A activity, interest in other Permian assets also remained high. “Public companies are willing to pay ever-higher prices for tier-one Permian acreage,” Enverus said.
For example, in its July sale, Matador paid $1.3 billion for EnCap Investment’s Paloma Permian assets.
“Higher crude is supercharging both the private sellers coming to market and public company appetite for inventory,” Dittmar said. “We expect a much busier second half, with private companies as the primary source of assets and public buyers and ABS capital as the two active bidding groups,” concluded Dittmar.
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