Non-Permian shale plays to attract “significant” investments soon amidst U.S. M&A wave, Rystad Energy reports

(WO) – After the biggest first quarter for global upstream dealmaking in five years, the industry could see another $150 billion of merger and acquisition (M&A) deals in the remainder of 2024.

With global M&A deal value crossing the $64 billion mark already this year, it represents the strongest first-quarter performance since 2019 and a 145% increase on the first quarter of 2023, fueled primarily by consolidation in the U.S. shale patch.

The Permian basin has dominated recent dealmaking, but other shale plays look set to attract significant investments soon, with about $41 billion of non-Permian opportunities on the market.

This includes the potential sale of Bakken-focused Grayson Mill Energy, Uinta-focused XcL Resources, ExxonMobil's Bakken portfolio, EQT's remaining non-operated Marcellus portfolio and certain Haynesville assets from Shell and BP.

ExxonMobil, Chevron, Occidental Petroleum (Oxy) and Diamondback Energy's portfolio adjustments are set to invigorate short-term M&A activity. These companies have all made significant recent acquisitions and now plan to divest non-core assets, paving the way for growth among regional upstream players.

For instance, Chevron intends to divest approximately $10 billion to $15 billion of assets by 2028, while Oxy plans to divest between $4.5 billion and $6 billion.

The Permian has been the focal point for M&A activity in recent times, but that focus is waning as available assets in the basin become scarce. But with appetite still strong, deal-hungry players are looking outside the basin for acquisitions. A power shift could be on the cards, with non-Permian assets taking center stage in the future North American deals pipeline.