The oil and gas industry in 2024 made global headlines with significant mergers and acquisitions (M&A), demonstrating strategic moves by companies to secure competitive advantages in a rapidly evolving energy landscape. While deal activity mirrored 2023’s consolidation trend, the total deal value dropped sharply, with the largest M&A of 2024 reaching $26 billion compared to the $60 billion peak of the previous year. Here’s a closer look at the major trends and notable deals that defined the year.
Key Industry Trends
- Consolidation in Shale:
Shale consolidation continued to dominate the industry’s M&A activity, particularly in the Permian Basin. Larger companies acquired smaller players to enhance operational efficiencies and reduce costs. This trend underscored the importance of scale in optimizing production and staying competitive. - Rising Interest in Service and Midstream Companies:
The acquisition of service companies reflected efforts to strengthen market positioning as the energy landscape shifted. Meanwhile, midstream deals emphasized vertical integration, enabling companies to control more of the value chain and improve profitability. - Diversification in Petrochemicals:
In the petrochemical sector, diversification emerged as a key theme. Companies expanded into high-growth areas such as specialty chemicals, advanced materials, and sustainable solutions, signaling a focus on future-ready technologies and markets.
Major Deals of 2024
1. Diamondback Energy & Endeavor Energy Resources ($26bn)
In September, Diamondback Energy merged with Endeavor Energy Resources, creating the third-largest producer in the Permian Basin. The newly formed entity boasts a daily production of 816,000 barrels of oil and gas and a pro forma footprint of approximately 838,000 net acres.
2. ConocoPhillips & Marathon Oil ($22.5bn)
ConocoPhillips finalized its acquisition of Marathon Oil in November, adding $5.4 billion in debt to the deal. This transaction brought an additional two billion barrels of compatible resources to Conoco’s portfolio, with plans to return over $20 billion to shareholders through share buybacks in the coming years.
3. Chesapeake Energy & Southwestern Energy ($7.4bn)
The merger of Chesapeake Energy and Southwestern Energy in October created a formidable natural gas portfolio. The new company’s production rate is approximately 7.9 billion cubic feet (bcf) equivalent per day, supported by a 15-year inventory of development opportunities.
4. Sunoco & NuStar Energy ($7.3bn)
In May, Sunoco’s acquisition of NuStar Energy expanded its liquids terminal and pipeline operations, adding over 15,200 kilometers of pipeline and 63 terminal facilities. The deal is expected to yield $150 million in cost savings by its third year post-closure.
5. Chevron & Canadian Natural Resources ($6.5bn)
Chevron sold its Alberta assets to Canadian Natural Resources as part of its strategy to divest $10–15 billion in assets by 2028. This transaction included stakes in the Athabasca Oil Sands Project and the Duvernay shale.
6. EQT & Equitrans Midstream ($5.5bn)
EQT’s acquisition of Equitrans Midstream created a vertically integrated natural gas company with 27.6 trillion cubic feet equivalent of proved reserves and over 2,000 miles of pipeline infrastructure.
7. Devon Energy & Grayson Mill Energy ($5bn)
Devon Energy acquired Grayson Mill’s assets in July, securing production of 100,000 barrels of oil equivalent per day by 2025 and extending its inventory life in the Williston Basin by a decade.
8. APA & Callon Petroleum ($4.5bn)
APA’s acquisition of Callon Petroleum boosted its presence in the Delaware Basin, increasing its total production to over 500,000 barrels of oil equivalent per day.
9. Chord Energy & Enerplus ($3.8bn)
Chord Energy’s acquisition of Enerplus created a low-cost operator with 1.3 million net acres in the Williston Basin and an enterprise value of $11 billion.
10. Oneok & EnLink ($3.3bn + $4.3bn)
Oneok consolidated control over EnLink Midstream, adding integrated midstream infrastructure services for natural gas, crude oil, natural gas liquids, and CO₂ transportation for carbon capture.
Broader Implications
The M&A activity in 2024 reveals several broader industry dynamics:
- Efficiency and Scale: The drive for larger, more efficient operations is evident, particularly in shale and midstream sectors. Companies are leveraging M&A to streamline costs and enhance production capabilities.
- Sustainability and Innovation: Investments in specialty chemicals and sustainable solutions highlight a growing focus on the future of energy. This shift indicates a strategic alignment with global decarbonization efforts.
- Integrated Operations: Vertical integration through midstream acquisitions reflects a trend toward end-to-end operational control, improving resilience and profitability.
Looking Ahead
As the industry navigates a dynamic energy landscape, M&A will likely remain a critical tool for growth, efficiency, and adaptation. Companies that prioritize strategic consolidation, diversification, and innovation will be best positioned to thrive in the years to come.
Stay tuned for more insights into the evolving world of oil and gas—a sector that continues to shape the global energy narrative.
