In March, the upstream oil and gas sector experienced a dramatic decline in asset deal value, plummeting to $5.55 billion from $32 billion in February, despite a steady transaction volume of 35 deals. South America led the activity, accounting for 55% of total deal value, with notable transactions including Prime Infrastructure’s $1.4 billion acquisition of SierraCol Energy and Parex Resources’ $725 million purchase of Frontera Energy’s Colombian portfolio, indicating strong interest in producing assets even amid softer pricing.
The significant drop in North American deal value, which fell below $1 billion for the first time since June, highlights a shift in market dynamics. Canadian Natural Resources’ acquisition of Peace River High assets for C$765 million exemplifies ongoing consolidation trends in the region. Meanwhile, the overall upstream opportunities pipeline remains robust, with approximately $95 billion available globally, predominantly in North America.
Market professionals should note that while producing asset valuations hold steady, discovery-stage assets are losing value, suggesting a potential shift in investment focus towards cash-generating properties amid evolving market conditions.
Source: oilprice.com