Winning Strategies for Upstream M&A in 2025: How to Value, Build and Exit with Confidence 

Introduction: Competing for Quality in a Changing Market

The upstream M&A market in 2025 is defined by a paradox: record-high deal values, but fewer buyers. As capital becomes more selective and inventory more scrutinized, the rules of engagement have changed. No longer is it enough to bring production to the table, buyers now demand strategic fit, operational efficiency and data-backed proof of future value.

This e-book is designed to help upstream operators, investors, and analysts navigate this evolving landscape. Drawing on real-world case studies, market data and advanced modeling techniques, we’ll explore how to:

Value undeveloped inventory using modern metrics
Benchmark capital efficiency to stand out in a crowded market
Model development scenarios to assess strategic fit
Avoid common pitfalls that derail deals.

Whether you’re a private operator preparing for exit, a buyer seeking high-quality assets, or an analyst tasked with valuation, this guide will equip you with the insights and tools needed to compete (and win!) in today’s M&A environment.

Let’s begin by examining the market forces reshaping upstream M&A in 2025.

Market Trends in Upstream M&A (2025)

In 2025, the upstream M&A market has shifted from its previous Permian-centric focus to a more geographically diverse landscape. Buyers are now screening a wider range of assets for acquisition opportunities, with growing interest in regions such as the Midland Basin, Eagle Ford, Williston Basin and Western Canada. This diversification is driven by the saturation of core Permian acreage and the emergence of high-quality private opportunities in other basins.

Transaction Values and Deal Activity

The first quarter of 2025 saw approximately $17 billion in upstream M&A activity. While deal volume remains lower than in previous years, the average deal size has increased significantly. Notable transactions include EQT’s acquisition of Appalachian assets and US Energy’s purchase in the Delaware Basin. Buyers are paying $3–4 million per undeveloped location for inventory that breaks even at $45–50 per barrel, with some moving up the cost curve to target $55–60 breakeven assets.

Corporate vs Property Dynamics

Recent activity has been dominated by property deals, with dozens of transactions totaling billions in value. While corporate mergers still occur (particularly among public companies), strategic alignment and management compatibility remain key hurdles. The market has seen a shift toward fewer but larger deals, with a growing emphasis on long-term inventory quality over short-term production metrics.

What’s Driving the Market in 2025?

Several macro and strategic factors are shaping the upstream M&A landscape:

ASSET Scarcity: High-quality inventory is increasingly rare, prompting buyers to expand their search beyond traditional core areas.
SECONDARY Liquids Plays: As competition intensifies in the Permian, private capital is turning to less crowded liquids-rich basins.
GAS-Weighted Deals: The resurgence of gas M&A—driven by rising LNG export demand—has pushed gas deal value from $5 billion in 2023 to over $20 billion in 2024.

Strategic Implications for Upstream Companies

To succeed in this evolving environment, upstream companies should consider:

OPERATIONAL Efficiency: Buyers are rewarding disciplined operators who can demonstrate strong EURs and capital efficiency.
EXPLORING Less Consolidated Areas: With the Permian increasingly consolidated, attention is shifting to underdeveloped basins like the Uinta and parts of Western Canada.
GAS Asset Positioning: With gas prices rebounding and LNG exports rising, gas-heavy portfolios are becoming more attractive acquisition targets.

These trends set the stage for the landmark deals we’ll explore next. To see how leading operators are navigating these trends with data-driven strategies, explore our solutions that help you develop and optimize your inventory here.

Diamondback and Whitecap: Two M&A Case Studies

Two significant M&A deals have shaped the upstream oil and gas market in 2025 so far – Diamondback’s acquisition of Double Eagle and Whitecap’s acquisition of Veren. As we will see a little later, these case studies provide a great foundation for understanding the strategies and approaches used by leading companies in the industry. We will delve deeper into the specifics of these deals in subsequent sections, particularly focusing on asset valuation and development, but let’s quickly go through the basics now.

Diamondback's Acquisition of Double Eagle's Properties

Diamondback Energy’s acquisition of Double Eagle’s properties in the Midland Basin is a prime example of strategic consolidation in a highly competitive market. Announced in February 2025, this deal involved Diamondback paying approximately $4 billion for Double Eagle’s assets, which included around 40,000 net acres and 342 net locations. The acquisition price per undeveloped location was notably high, at about $7.3 million.

This transaction highlights Diamondback’s focus on expanding its footprint in the Midland Basin, while leveraging the high-quality undeveloped inventory of Double Eagle. Like we hinted at in the introduction, this deal also underscores the importance of strategic fit and operational efficiencies in driving value creation. In the following section we will explore how operators looking to make an exit need to move beyond a straightforward PDP analysis to prove value to potential buyers.

Whitecap Resources and Veren's Merger

The merger between Whitecap Resources and Veren in the Duvernay-Montney play represents another significant M&A deal in 2025. Valued at nearly $5 billion, this merger combines the strengths of both companies, while creating a new entity with substantial production and inventory capabilities. The combined entity now stands as the sixth largest operator for proved, developed, producing wells in the basin.

Whitecap and Veren’s merger was driven by the strategic alignment of their assets and the potential for enhanced operational efficiencies. In later sections, we will examine the methodologies used to evaluate the combined inventory and production potential of Whitecap and Veren.

Conclusion

These Diamondback and Whitecap case studies illustrate both the dynamic nature of the upstream M&A market in 2025, and signals key shifts in how inventory is assessed and valued in the market going forward. Both deals highlight the importance of strategic fit, operational efficiencies, and accurate asset valuation in driving successful transactions. As we progress through this e-book, we will draw on these examples to illustrate a few proven strategies and approaches for asset valuation as well as development approaches.

Proving the Value of Undeveloped Inventory

In today’s upstream M&A market, undeveloped inventory is often the most valuable (but also the most scrutinized) component of a deal. Buyers are no longer content with vague upside potential. They expect clear, data-backed valuations that demonstrate how undeveloped reserves translate into future cash flow.

That said, it’s getting harder to prove the value of undeveloped assets and potential sellers looking for an exit need to embrace a flexible data-driven approach when assessing existing assets, whether they’re proven or not. To meet these expectations, sellers must move beyond traditional PDP-based metrics. While PDP still plays a role, buyers now prioritize:

Price per location
NPV per acre
Dollars per BOE/day

The key is not just using these metrics but showing how they were derived. PRISM enables operators to model undeveloped value at the DSU level, incorporating custom spacing assumptions, flow unit-level intelligence and type curves based on actual operator behavior. This level of granularity builds trust and credibility with buyers.

A standout example is the already-mentioned $4 billion acquisition made by Diamondback of Double Eagle’s Midland Basin assets. Despite softening commodity prices, Diamondback paid approximately $7.3 million per undeveloped location. It’s important to note that only 34% of the deal value was attributed to PDP, with the rest driven by undeveloped reserves. Using Enverus PRISM, analysts were able to recreate 401 of the 407 undeveloped locations cited in the deal, allowing us to validate the valuation and offer a peak into how our approach could be replicated in other territories.

To learn more about how Enverus supports this kind of modeling and valuation, visit here.

DSU Modeling Workflow: From Acreage to Asset Valuation

The Diamondback-Double Eagle example illustrates a broader trend: buyers are willing to pay premiums for undeveloped inventory, but only when the value is proven through rigorous modeling. Sellers who can demonstrate how their inventory was placed, what assumptions were used, and how those assumptions align with regional development patterns are far more likely to command attention, and premium pricing.

Takeaway:

DSU-level modeling is becoming the standard for undeveloped asset valuation.
Sellers must demonstrate not just potential, but  provable, modeled value.
Tools like PRISM are essential for building buyer confidence and justifying deal terms.

Benchmarking Capital Efficiency to Exit

As we turn a new page in the upstream M&A market, capital efficiency has become one of a small number of defining metrics for buyers. In other words, it’s no longer just about what you’ve produced—it’s also about how efficiently you got there. Buyers want to see that capital has been deployed wisely, with a clear return on investment. Key metrics now include:

CapEx vs. EUR: How much oil is recovered per dollar spent?
Inventory preservation: Are you maximizing long-term value?
Spacing and intensity: Lateral length, proppant intensity and well density.

Operators like Double Eagle were able to demonstrate strong capital discipline, while achieving high EURs with optimized spacing and completion designs. Their approach resulted in high initial production and sustained performance, making them a highly attractive acquisition target. In contrast, Birch pursued a full-field development strategy, deploying capital aggressively to maximize short-term output. While this delivered strong early returns, it also led to steeper declines and reduced long-term upside. Using Enverus PRISM, analysts can benchmark these strategies at the DSU level. Using visualizations of oil recovery versus capital spend reveals how companies like Surge, Sequitur, and High Peak compare. Some preserve inventory life by spacing out development, while others front-load production to boost near-term metrics.

Capital Efficiency in Focus: DSU-Level Production vs. Spend

Benchmarking also helps identify operational outliers—both positive and negative. For example, a company with lower D&C costs but similar EURs may offer untapped value. Conversely, high capex with underwhelming recovery can signal inefficiencies or poor development planning.

Takeaways:

Capital efficiency is now a core valuation driver.
Benchmarking can reveal both strengths and red flags in development strategy.
Sellers who can demonstrate disciplined, efficient development are more likely to command premium valuations and stand out in a competitive market.

Smart Development Scenarios: Lessons From the Delaware Basin

Development strategy plays an important role in shaping long-term asset value. In a market where buyers are assessing not only what an asset produces but how it has been developed, comparisons between operator strategies offer useful insights. Chevron and Coterra, both active in the Delaware Basin, approached development differently. Chevron co-developed multiple intervals with higher well density, aiming to capture early production. Coterra opted for a phased approach, spacing development across zones to preserve flexibility and manage capital. In Enverus PRISM, we analyzed these strategies:

Chevron drilled about 20 wells per section in Wolfcamp A, B and C.
Coterra developed roughly 15 wells per section, prioritizing Wolfcamp initially and developing Third Bone Spring later.
Chevron achieved greater cumulative production but required more upfront investment.

By modeling these scenarios, teams can examine how development sequence, spacing and capital allocation impact outcomes. This type of analysis helps assess potential trade-offs across different strategies.

Development Strategy Comparison: Chevron vs. Coterra in the Delaware Basin

Takeaway: Development strategy can influence both near-term returns and long-term inventory value. Modeling different scenarios provides important context for decision-making.

The Return of Gas Assets

Gas-weighted assets are gaining renewed attention in 2025. This shift is supported by rising U.S. LNG exports and moderate price recovery, which have made some gas portfolios more attractive.

However, while interest is growing, buyers remain selective. Assets must show economic viability under a range of assumptions not just in terms of scale but also capital efficiency and future potential.

With PRISM, users can:

Map gas-weighted inventory by operator, zone, and location.
Apply type curves and forecast economics across price scenarios.
Estimate well-level performance using local analogs.
Filter by cost structure, spacing, and recovery expectations.

The Whitecap and Veren merger offers a timely example. Analysts identified nearly 10,000 undeveloped locations, helping position the combined entity for long-term growth in the Montney and Duvernay.

Takeaway: Gas assets can be competitive when supported by clear, well-documented economics. Modeling helps clarify which opportunities are viable in the current environment.

Conclusion: Winning With Data, Discipline and Development Strategy

The 2025 upstream M&A market is shaped by strong deal values and more rigorous buyer expectations. Today, the focus is not only on what assets are producing now, but what they might produce in the future, and more importantly how efficiently that value can be unlocked.

This e-book has covered several important themes:

Market Shifts: The deal landscape is broadening, with buyers targeting secondary liquids plays and gas-weighted assets as Permian opportunities become more competitive.
Case Studies: Diamondback’s acquisition of Double Eagle and the Whitecap-Veren merger highlight how scale, alignment and development strategy all factor into valuation.
Undeveloped Inventory: PDP remains relevant, but undeveloped locations increasingly drive value. Demonstrating the quality of that inventory through DSU-level modeling is now expected.
Capital Efficiency: Buyers want to know how capital has been used and what kind of returns it has generated. Development practices such as spacing, completion design and zone targeting are under review.
Scenario Planning: As seen in the Chevron and Coterra comparison, different development strategies produce different results. Modeling helps frame these trade-offs.
Gas Opportunities: Improved fundamentals have brought gas back into focus, but modeling remains essential to proving their value.

Common Pitfalls to Avoid:

Relying too heavily on PDP metrics.
Overlooking regional development patterns and spacing data.
Assuming high commodity prices offset low efficiency.
Failing to evaluate undeveloped potential rigorously.
Underestimating the role of strategic fit.

Tools That Support the Process:

Inventory modeling at the DSU level.
Scenario testing for development plans.
Benchmarking capital efficiency and well performance.
Screening opportunities across oil and gas basins.

Final Thought: Success in today’s upstream M&A market depends on clear analysis and credible modeling. Demonstrating value rather than just projecting it can help both buyers and sellers make better-informed decisions.

To explore how Enverus workflows support your M&A process, visit our resource library or connect with our team for a custom walkthrough.

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