Oil Majors To Consolidate: Watch For Further M&A Activity Across Sector In 2024
Portfolio Pulse from Neil Dennis
Oil and gas M&A activity is expected to continue into 2024, with Exxon Mobil (XOM) and Chevron (CVX) having made significant acquisitions in 2023. Exxon acquired Pioneer Natural Resources (PXD) for $60 billion, and Chevron bought Hess (HES) for $53 billion. These deals reflect a belief in the long-term demand for fossil fuels. European majors like BP (BP) and TotalEnergies (TTE) have focused on green energy but may increase activity in fossil fuels. BP is considering spinning off its BPX segment, and Shell (SHEL) is expected to focus on Canadian gas to support its LNG business. U.S. upstream M&A has totaled $181 billion, surpassing the five-year average.
December 06, 2023 | 4:53 pm
News sentiment analysis
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NEUTRAL IMPACT
BP's potential spin-off of its US onshore business BPX could provide funds for investment in U.S. oil and gas assets, impacting its stock.
The consideration of a spin-off indicates strategic moves within BP that could affect its stock, but the impact is uncertain until further details emerge.
CONFIDENCE 75
IMPORTANCE 65
RELEVANCE 70
NEUTRAL IMPACT
TotalEnergies' potential increase in activity in the fossil fuels space may affect its stock as it balances green investments with traditional energy.
TotalEnergies' shift towards more fossil fuel activity could have mixed impacts on its stock, depending on market perception of its long-term strategy.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 60
POSITIVE IMPACT
Chevron's $53 billion acquisition of Hess indicates a similar investment in the longevity of the oil and gas sector.
Chevron's acquisition mirrors Exxon's strategy, suggesting a bullish outlook on the oil and gas market that could attract investor interest.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
Hess's acquisition by Chevron for $53 billion is likely to influence its stock price positively in the short term.
The acquisition by Chevron could be seen as a positive development for Hess, likely resulting in a favorable short-term stock price movement.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Pioneer Natural Resources' acquisition by Exxon Mobil for $60 billion could lead to short-term stock price appreciation.
Being acquired by a major player like Exxon could lead to a positive short-term impact on PXD's stock as the market reacts to the consolidation.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Shell's focus on expanding its Canadian gas footprint to support its LNG business could positively influence its stock in the short term.
Shell's targeted M&A strategy in Canada is likely to be viewed positively as it aims to strengthen its LNG operations, potentially benefiting its stock.
CONFIDENCE 75
IMPORTANCE 65
RELEVANCE 70
POSITIVE IMPACT
Exxon Mobil's acquisition of Pioneer Natural Resources for $60 billion reflects a strategic bet on the long-term demand for oil and gas.
Exxon's acquisition is a significant move that demonstrates confidence in the future of fossil fuels, which could positively influence investor sentiment in the short term.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90