U.S. oil mergers surge as energy, share prices recover from pandemic

* U.S. oil mergers hit $33 billion on large number of megadeals

* Combinations of natural gas drillers account for 20% of value

HOUSTON, July 12 (Reuters) – U.S. oil and gas mergers surged last quarter with the most $1 billion plus combinations since 2014, according to data released on Monday, as rising energy and share prices led to larger oilpatch deals.

Producer are consolidating in U.S. shale as oil and natural gas prices recover from last year’s pandemic swoon and this month traded at multi-year highs. Smaller producers also are snapping up unwanted properties in a bet on continued demand for oil and gas while some big oil companies shift their acquisition emphasis to renewables.

Total value of the 40 reported deals last quarter was $33 billion, estimated energy data provider Enverus Inc, up from $44.5 billion for all of last year.

The quarter’s seven $1 billion plus deals were mostly in Texas and Colorado oilfields but a fifth of the total value was spend on natural gas properties in the U.S. east, said Andrew Dittmar, Enverus’ senior M&A analyst.

BIG GAS MERGERS

Natural gas shot into the spotlight with U.S. prices rising 40% this year, helping spark Southwestern Energy’s $2.7 billion acquisition of Indigo Natural Resources and EQT Corp’s $2.9 billion deal for northeast gas producer Alta Resources.

“There is still a lot of activity out there,” said Dittmar, citing recovering share prices and the number of private-equity backed firms looking to sell. “Public companies are not done consolidating” smaller, closely-held producers, he said.

“If commodity prices stay strong, we’ll see a fairly active rest of the year,” Dittmar said.

A number of top oil companies including Royal Dutch Shell, Chevron, Exxon Mobil, and Occidental Petroleum are considering or have put U.S. oil properties on the market due to rising buyer interest.

CABOT-CIMAREX TOPS LIST

Top deals by price last quarter were Cabot Oil and Gas’s $7.4 billion combination with Cimarex Energy and Pioneer Natural Resources’ $6.4 billion acquisition of closely held DoublePoint Energy, both for assets in the Permian Basin of West Texas and New Mexico.

KKR & Co’s Independence Energy merged with Contango Oil & Gas, a deal that valued the pair at $5.7 billion, including debt, and will become a platform to acquire other producers.

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