Dealmaking activity in the U.S. oil patch improved in the second quarter, after a subdued start to the year, helped by deals targeting assets in the gas-rich Appalachian region, according to data from oil and gas analytics firm Enverus, Reuters reported.
U.S. gas prices recovered in the last three months as a drop in oil output to counter a collapse in crude prices due to the coronavirus crisis and a price war between Saudi Arabia and Russia helped drain excess supply of natural gas, a by-product of crude production.
Enverus data showed that deals made by oil and gas producers forked up to $2.6 billion in the second quarter, up from $770 million recorded in the first quarter.
The jump was mainly driven by acquisitions of assets in Appalachia, a region including West Virginia and parts of Kentucky, Ohio and Pennsylvania.
“With the uncertainty around oil, the limited buyers largely targeted low-cost natural gas assets during Q2,” said Andrew Dittmar, an M&A analyst at Enverus.
Shell’s sale of its Appalachia shale gas assets for $541 million to National Fuel Gas and Antero Resources’ sale of some of its royalty income from its assets in the region for $402 million were among the largest deals.
Reporting by Taru Jain; Editing by Aditya Soni
