U.S. upstream mergers and acquisitions fell sharply in the third quarter of 2025 as persistently low oil prices sidelined many potential buyers and slowed deal flow, according to new analysis from Enverus Intelligence Research (EIR).
Total transaction value reached $9.7 billion, marking the third consecutive quarterly decline and underscoring a sharp cooldown after a strong start to the year. Analysts said the pullback reflects both price pressure and limited appetite for oil-weighted private equity exits that had driven much of the market’s earlier momentum.
“Crude prices in the mid-$60s or lower have made it tough for sellers, especially private equity firms with oil-heavy 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.”
Despite the slowdown, several notable transactions closed during the quarter, particularly among small- and mid-cap operators. Highlights included Crescent Energy’s acquisition of Vital Energy for more than $3 billion in stock and assumed debt, and Berry Petroleum’s $717 million sale to California Resources Corporation.
EIR noted that SMID-cap consolidation is becoming an increasingly dominant trend as quality private inventory diminishes and public company valuations remain compressed.
“Consolidation among SMID-cap companies is the obvious strategic path forward in U.S. oil and gas M&A,” Dittmar added. “High-quality inventory from private sellers is becoming scarce and difficult for these companies to buy given their low trading multiples.”
While oil-weighted deals slowed, natural gas assets provided a bright spot. Buyers remained constructive on the commodity’s long-term fundamentals, supported by growth in U.S. LNG exports and rising data center power demand.
“Natural gas is gaining momentum heading into late 2025 and 2026,” Dittmar said. “Interest is broad-based, including international firms and private capital actively pursuing opportunities.”
EIR said the near-term M&A outlook remains subdued, as subdued crude prices discourage private sellers from bringing assets to market. However, targeted consolidation among SMID-cap producers and continued activity in gas-weighted assets are expected to sustain moderate deal flow through early 2026.
“The market is adapting to lower oil,” Dittmar concluded. “We expect strategic consolidation and selective acquisitions to keep M&A activity moving forward.”
