Dealmaking in the U.S. oil patch has slowed to a crawl in 2025, with the activity expected to stay muted for the rest of the year, as some prolific buyers focus on squeezing out value from their past acquisitions, while others curb their appetite for takeovers due to weak oil prices and trade uncertainty.
Oil companies have spent $17 billion on acquisitions in the last three months, a steep fall from the height of dealmaking in the third quarter of 2023, where they splurged $144 billion on M&A.
Benchmark U.S. crude recently slid to about $55 a barrel from about $78 in January, just before President Donald Trump took office, dragged down by rising OPEC+ output and renewed trade tensions.
“We’re in a period right now where there’s so much noise and volatility that not a lot gets done,” Diamondback Energy CFO Kaes Van’t Hof said on a recent earnings call.
“Anything that we would look at would have to be extremely cheap, and I just don’t think we’re there yet today.”
Investor caution also stems from concerns over Trump’s trade policies.
Despite his push to boost U.S. drilling, trade tensions could dampen growth and demand.
“(Deal) activity is likely to stay muted for the rest of 1H25 but there could be a pickup in the back half of the year, particularly if trade deals are announced that reduce the odds of a U.S. recession,” said Andrew Dittmar, principal analyst at Enverus
The challenge is finding the right fit as investors do not want size for size’s sake but credible in-field operational synergies, Dittmar added.
Most premium assets in the Permian – North America’s top shale play – have also been snapped up during the M&A frenzy, leaving behind mostly those acreages that are not highly viable in the current low oil-price scenario.
That’s making dealmaking even harder, as buyers tread carefully to avoid overpaying for second-tier assets.
“Nobody wants to dilute their portfolio with acreage out on the fringe of the play,” said Raoul LeBlanc, VP at S&P Global Commodity Insights.
Big Players Stay Cautious
Even large players are showing restraint.
Exxon Mobil, fresh off its $60 billion Pioneer deal, is focused on value creation.
“One plus one has to equal three,” CEO Darren Woods said during a recent earnings call, stressing any deal must create outsized value.
Others are still digesting recent purchases.
“We’ve obviously been very busy over the last year and a half with Endeavor and Double Eagle,” Van’t Hof said, referring to two major Permian Basin buys.
