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(Read) – Mergers and acquisitions (M&A) activity in the US oil and gas sector surged threefold last year, even as commodity prices remained lower than the 2022 highs, according to a new report released on Tuesday. This marks a significant strategic shift in the industry, as major energy companies focused on improving efficiency and profits through consolidation.

Why It Matters

The dramatic increase in dealmaking reflects a pivot away from the recent industry trend of prioritizing shareholder returns over growth. Energy companies, flush with cash, are now aiming to drive operational efficiency through greater scale.

Key Drivers and Industry Context

A wave of sector-wide consolidation has been led by megadeals involving some of the largest players, including Exxon Mobil, Diamondback Energy, and ConocoPhillips. “It’s a relook at process, tools, workforce and everything around your operations,” said Bruce On, partner at EY’s strategy and energy transactions group.

By the Numbers

• Leading energy companies spent $206.6 billion on M&A in 2024, a sharp increase from $47.9 billion the previous year, according to an Ernst & Young (EY) study.

• Dividend and share repurchase payments dropped by about 25% to $29.2 billion last year.

• Spending on exploration and development declined 7% year-on-year, totaling $85.5 billion.

• Sector profits fell by 10% to $74.8 billion, less than half the record profits seen in 2022, mainly due to softer commodity prices.

• Exxon Mobil emerged as the biggest acquirer in 2024, with property acquisition costs totaling $84.5 billion. The company’s acquisition of US shale oil producer Pioneer Natural Resources, first announced in October 2023, was completed in May 2024 for $60 billion.

Bhupendra singh chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur kiranhis insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.