Data in Evaluate Energy’s latest quarterly review of global M&A activity shows that while the second quarter saw $20 billion of new upstream oil and gas M&A deals, this represented a 46 per cent drop on total spending in Q1, and a 29 per cent drop compared to the same quarter last year.

The surprise here is that M&A outlay has been muted during a period of sustained strong oil prices — relative to recent quarters and certainly compared to last year; WTI averaged $68.07/bbl in Q2, which is 34 per cent higher than 2017’s average.

Source: Evaluate Energy Global Upstream M&A Review, Q2 2018

The Evaluate Energy report looks at the reasons behind the drop in activity, touching on uncertainties around OPEC and Russia, and supply constraints in significant U.S. areas as key factors.

It also reveals that Canada saw three of the five largest deals this quarter. Large deal activity in Canada has been relatively scarce since Q1 2017’s major oilsands deals, but this quarter was certainly different. Two acquisitions of intermediate producers were agreed with a value of +$1 billion apiece, while Royal Dutch Shell plc continued its divestment plans with a $3.3 billion sale of a 7.98 per cent stake in Canadian Natural Resources Limited.

Top 5 upstream deals worldwide in Q2 2018

Source: Evaluate Energy Global Upstream M&A Review, Q2 2018

Evaluate Energy’s review of global M&A activity in Q2 2018, which includes analysis on the largest upstream deals in Canada, the U.S. and around the world over the past three months, can be downloaded at this link.