CALGARY, Alberta (October 22, 2025) — Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the leading energy-dedicated SaaS company harnessing generative AI across its solutions, has released its 3Q2025 U.S. oil and gas M&A report, offering insights into an upstream market still waiting for its big hit.
After a hot start to the year, upstream mergers and acquisitions slid into a slump in the third quarter, with deal value dropping to $9.7 billion, marking the third straight quarterly decline. Persistently low crude prices have kept many buyers on the bench, particularly for oil-weighted private equity-backed oil and gas exits that fueled much of the activity in the recent past.
“Crude prices in the mid-$60s or worse have made it tough for sellers, especially private equity firms with oil-weighted assets,” said Andrew Dittmar, principal analyst at EIR. “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/bbl WTI, while 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.”
Still, the quarter wasn’t a complete shutout. SMID-cap corporate combinations and gas-weighted deals provided some action. Notable transactions include Crescent Energy’s (CRGY) acquisition of Vital Energy (VTLE) for more than $3 billion in stock and assumed debt and Berry Petroleum’s (BRY) $717 million sale to California Resources Corporation (CRC). These all-equity combinations accounted for 40% of the quarter’s total value; each struck at sub-20% premiums setting the tone for future SMID-cap matchups.
“Consolidation among SMID-cap companies is becoming the obvious strategic path forward in U.S. oil and gas M&A as high-quality inventory from private sellers becomes scarce and challenging for these companies to buy given their low trading multiples,” Dittmar noted. “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. However, companies will need to scout for prospects with overlapping in-basin operations. Investor scrutiny on the value created by deals remains high, with a particularly skeptical eye cast towards to deals lacking clear operational synergies.”
Natural gas assets emerged as a bright spot in 3Q25. Buyers remain constructive on the commodity as liquified natural gas (LNG) exports and ramping datacenter power demand fuel expectations for higher prices. That includes increasingly seeking out secondary sources of gas supply. That search provided a tailwind for Anadarko Basin dealmaking, with transactions in the region making up 20% of total quarterly deal value. A diverse set of buyers including TotalEnergies, Stone Ridge Energy and Diversified Energy all recently pursued acquisitions in the basin drawn by its ability to supply significant gas volumes in addition to liquids.
“Natural gas is gaining momentum heading into 4Q25 and 2026,” said Dittmar. “Interest is broad-based, including international firms and private capital actively pursuing opportunities. Elevated asset prices in the Haynesville, driven in large part by demand from Asia-based buyers seeking LNG-linked gas exposure, are prompting others to explore alternative regions. Recent activity targeted the Anadarko basin, but the Rockies may be ready to step up to the plate.”
As U.S. shale continues towards its latter innings, the focus for some players is shifting towards optimizing mature assets and extending production life, which also factors into M&A markets. Late-life asset specialist Diversified Energy (DEC), which acquired Canvas Energy in 3Q25 after buying Maverick Natural Resources earlier in the year, is an active buyer of late-life assets with market support for its strategy. The company is joined by resurgent upstream MLPs TXO Partners (TXO) and Mach Natural Resources (MNR). Mach made two notable acquisitions in the quarter expanding its operations into the San Juan Basin and Central Basin Platform. Presidio Petroleum will be a new public company pursing this strategy once it completes its SPAC merger with EQV Ventures. Large shale operators traditionally focused on drilling new inventory are also exploring redevelopment opportunities, both within existing assets and as part of potential acquisitions.
While existing private equity portfolio companies seem to be sitting tight until oil prices improve, a new wave of capital is actively scouting for opportunities. With major shale plays and core inventory largely locked up by big public operators, these teams are adjusting their strategy by looking to secondary basins, deeper intervals in the always dynamic Permian, and even exploring international options such as Canada.
“Private equity teams looking to deploy capital may be disappointed at the lack of asset sales by public companies,” commented Dittmar. “We are seeing some regional exits, like ConocoPhillips (COP) selling its Anadarko Basin assets and Baytex Energy (BTE) reportedly considering an Eagle Ford exit. However, for the most part, these firms are likely to keep their operated shale inventory and instead turn to non-operated interests or even non-E&P assets, if they have them, to accelerate debt reduction.”
Looking ahead, 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. However, these conditions may also motivate further public company consolidation, particularly among SMID-cap E&Ps. Strong demand for natural gas, driven by LNG exports and power generation, should support continued deal flow in gas-weighted assets.
Insights from Enverus’ Investor Analytics, which analyzed management commentary from recent earnings calls, revealed companies were already signaling caution on deal valuations and limited opportunities — a trend likely to persist into 2026 and shape strategies for consolidation and targeted acquisitions.
“The market is adapting to lower oil, and we expect strategic consolidation and targeted acquisitions to keep M&A activity moving forward,” concluded Dittmar.
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Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers, and more than 40,000 suppliers. Learn more at Enverus.com.
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