Upstream A&D Market Rebounds After Q2 Uncertainty, Expect More Deals

Upstream A&D market activity surged in mid-year after a quarter of uncertainty and chaos caused by tariff uncertainty and commodity price volatility. Experts anticipate more deals in the second half of the year, with big public companies selling non-core assets to reduce debt and smaller producers and private operators ramping up activity in emerging plays. Major E&Ps like Exxon Mobil are open to new acquisitions after digesting their latest deals.

The upstream exploration and production (E&P) market has shown a significant uptick in activity during the mid-year period, following a quarter of uncertainty and chaos caused by tariff uncertainty and commodity price volatility. Analysts anticipate that this trend will continue into the second half of the year, with major players in the industry engaging in various strategic moves.

One of the key drivers of this increased activity is the need for major public companies to reduce debt by selling non-core assets. Additionally, smaller producers and private operators are ramping up activity in emerging plays, seeking to capitalize on the current market conditions. Major E&P companies like Exxon Mobil are open to new acquisitions after digesting their latest deals.

On August 14, BlackRock's iShares Ethereum Trust (ETHA) and iShares Bitcoin Trust (IBIT) recorded a combined $1 billion in net inflows, despite a broader market pullback that saw Bitcoin and Ethereum prices decline by over 5% [1]. This strong institutional demand for exposure to crypto through regulated, liquid vehicles underscores the growing confidence in digital assets. The buying surge came amid a technical development in Bitcoin’s price action, as the asset partially filled a key gap in the CME Group’s Bitcoin futures market, suggesting a potential bottoming process [1].

Meanwhile, Ampol Ltd. announced a planned A$1.1 billion acquisition of EG Group's local gas stations, which saw its shares surge by 9.5% in Sydney [2]. The deal, expected to complete in mid-2026, is being funded through a combination of debt facilities and A$250 million in shares. Analysts from JPMorgan and Morgan Stanley raised their recommendations on Ampol, citing the complementarity of the EG business to Ampol [2].

ExxonMobil has also been active in the upstream market. The company signed a deal to explore a vast area near Trinidad and Tobago for oil and gas, spanning over 2,700 square miles (7,000 square kilometers) and more than 6,500 feet (2,000 meters) deep [3]. The search is expected to start with a geophysical survey in the next six months, with drilling for testing to follow. This deal comes after a planned energy production partnership involving Trinidad and Tobago and neighboring Venezuela was halted by the U.S. government [3].

In another development, E Fund Management Co. Ltd. increased its stake in Exxon Mobil by 17.5%, owning 56,549 shares valued at $6.73 million after purchasing additional shares in the first quarter [4]. Exxon Mobil's recent quarterly earnings exceeded analyst expectations, reporting $1.64 EPS against a forecast of $1.47, although revenue declined by 12.4% year-over-year [4].

These activities highlight the dynamic nature of the upstream E&P market, with players engaging in various strategic moves to adapt to changing market conditions and reduce debt. The second half of the year is expected to see more deals, as companies continue to navigate the challenges posed by tariff uncertainty and commodity price volatility.

References:
[1] https://www.ainvest.com/news/bitcoin-news-today-blackrock-crypto-etfs-attract-1-billion-inflows-market-pullback-2508/
[2] https://www.ainvest.com/news/ampol-acquire-group-local-gas-stations-1-1-billion-2508/
[3] https://apnews.com/article/trinidad-exxonmobil-oil-gas-exploration-928faff4c8f1a0cb997c2d9e0b883a0b
[4] https://www.marketbeat.com/instant-alerts/filing-e-fund-management-co-ltd-grows-stake-in-exxon-mobil-corporation-nysexom-2025-08-13/