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U.S. oil deals sluggish despite Chevron, Devon boost: Enverus


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(Reuters) – The pace of mergers and acquisitions in the U.S. oil and gas sector during the third quarter tied with the first quarter for the worst in a decade, according to data released on Monday, as most shale producers remain reluctant to spend after an oil price crash this year

U.S. crude prices are lower by about a third from the start of the year, as the COVID-19 pandemic has hammered fuel demand and forced oil companies to focus on preserving cash to survive the downturn instead of boosting production.

Energy consultancy Enverus said just 28 deals with a disclosed value were signed during July-September.

However, the total value of these deals, at about $21 billion, was 19.4% higher than a year earlier, helped by oil major Chevron Corp’s CVX.N purchase of Noble Energy Inc NBL.O and Devon Energy Corp’s DVN.N merger with WPX Energy Inc WPX.N.

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Enverus valued those two mergers at $18.63 billion, almost 90% of the total deal value.

“There is a broad consensus that consolidation is a net positive for the industry… but it can be a challenge to find the right asset and balance sheet fits for accretive deals,” said Andrew Dittmar, senior M&A analyst at Enverus.

“It may take several more years for consolidation to play out.”



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