High value corporate mergers in the global upstream sector are becoming increasingly cash based.

Based on 2023 merger deals valued at over US$1 billion, all but one agreed by publicly listed companies worldwide have included cash as part of the transaction. This is in stark contrast to 2020 and 2021 during the pandemic, where cash played a much smaller role, said Eoin Coyne, senior M&A analyst at Evaluate Energy.

“There is just so much cash on-hand for larger producers. Last week’s $4.9 billion all-cash acquisition of Neptune Energy by Eni and Var Energi in Europe was the latest example.”

This is not to say that stock-based deals aren’t happening at all, however, added Coyne.

“Chevron’s agreement to acquire PDC Energy is an all-stock arrangement and ranks as 2023’s largest upstream deal so far. And when we looked at data for corporate acquisitions by public companies valued at less than $1 billion, all-stock deals have held at a long-term average of between 25-40 per cent in both 2022 and 2023.”

For more on Evaluate Energy’s M&A data, click here.