Year-over-year mergers and acquisitions (M&A) activity surged 331%, totaling $206.6 billion
Focus shifts to future drilling potential through strategic acquisitions
Capital returned to shareholders declined
NEW YORK, Aug. 19, 2025 /PRNewswire/ — The U.S. oil and gas industry is experiencing a seismic transformation, driven by a wave of mergers and acquisitions that has narrowed the field of top publicly traded exploration and production companies from 50 to just 40. This shift is detailed in the newly released US Oil and Gas Reserves, Production and ESG Benchmarking Study by Ernst & Young LLP (EY US). Despite the smaller set, the 40 companies analyzed still account for approximately 41% of U.S. oil and gas production in 2024 — a proportion consistent with previous years.
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This annual report analyzes five years of performance data from 2020 to 2024, revealing a sector increasingly defined by strategic consolidation, disciplined capital allocation and a focus on long-term resilience.
“This is a defining moment for the U.S. upstream sector,” said Pat Jelinek, EY Americas Oil & Gas and Chemicals Leader. “Fewer, stronger players are emerging, and they are better capitalized, more efficient and laser-focused on resilient growth. The new top 40 companies aren’t just survivors; they’re poised to shape the future of American energy.”
Capital reallocates toward strategic growth
The study highlights a notable shift in capital allocation strategies. Since peaking in 2022, shareholder returns through dividends and share repurchases have steadily declined across all peer groups, marking a reallocation of capital toward M&A.
The $206.6 billion in M&A activity in 2024 — up 331% from 2023 — was driven by five megadeals of more than $10 billion in value. In 2024, 42% of the acquired assets’ value was allocated to unproved properties, up from just 18% in 2023, signaling a clear intent to build future drilling inventory and secure long-term production potential.
Meanwhile, the capital spent acquiring proved reserves rose 12% year-over-year and 161% since 2020. Integrated companies paid $20.89 per barrel of oil equivalent (BOE), compared to $10.00 and $12.63 for large independents and independents, respectively.
Rising costs signal post-merger integration challenges
Despite two factors that typically help reduce production costs — falling commodity prices and expected synergies from M&A activity — costs per BOE rose by 1% in 2024. This unexpected increase highlights some of the operational challenges often seen in the early years post-M&A transaction.
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