Upstream oil and gas mergers and acquisitions: Domestic transactions in the U.S

This paper investigates drivers of mergers and acquisitions in the upstream industry by applying an empirical approach based on domestic transactions during last two decades in the U.S. The oil and gas industry, particularly, upstream industry has seen rapid developments in recent years. The discovery of new resources in unconventional oil and gas parallel to the horizontal drilling and fracking technology, the U.S oil and gas market shows changing patterns which is also reflected in investments in the oil and gas industry. Mergers and acqui-sitions in the upstream industry in the U.S has experienced increasing patterns, especially in domestic levels (post Shale revolution, booms and changing dynamics over last two decades). Our study recognizes that underlying facts of mergers and acquisitions investments in the oil and gas industry can vary from other industries and can be different than traditional economic explanations. The empirical results suggest that industry-specific variables have stronger influence on mergers and acquisitions than economic and political indicators. The drivers can be different based on various transaction forms and deal levels. Our findings provide a comprehensive view, test various theories of mergers and acquisitions and direct to sector-specific stylized facts of the U.S oil and gas market.