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By Georgina McCartney

HOUSTON, Oct 22 (Reuters) - Dealmaking in the U.S. upstream oil and gas sector slumped nearly 30% during the third quarter as persistently low oil prices kept buyers on the sidelines, analytics firm Enverus said on Wednesday.

Merger and acquisition activity has now fallen for three straight quarters, according to Enverus, marking a sharp departure from a period of blockbuster deal activity that included the $60 billion combination of Exxon Mobil XOM.N and Pioneer Natural Resources in 2023 and Chevron's CVX.N $53 billion purchase of rival Hess that closed this year.

Dealmaking in 2023 totaled a record $192 billion, then slipped to $105 billion in 2024, according to Enverus.

U.S. crude futures CLc1 averaged around $65 a barrel during the July through September period, just at the level many producers say they need to profitably drill, but $10 lower than the same quarter last year.

Deals totaling $9.7 billion were disclosed in the quarter ended September 30, Enverus said, marking a 28% drop quarter-over-quarter.

“Crude prices in the mid-$60s or worse have made it tough for sellers, especially private equity firms with oil-weighted assets,” said Andrew Dittmar, principal analyst at Enverus Intelligence Research.

“Most remaining shale M&A opportunities need stronger pricing to justify public companies paying for the undeveloped locations," he added.

Producer Crescent Energy bought smaller rival Vital Energy in an all-stock transaction valued at $3 billion in August, taking the lion's share of deals done in the third quarter, according to Enverus.

That deal gave Crescent a significant foothold in the Permian shale basin of Texas and New Mexico.

NATURAL GAS EMERGES AS BRIGHT SPOT

While assets focused on oil production felt pressure during the quarter, natural gas emerged as a bright spot, driven by rising demand for liquefied natural gas exports and energy-hungry data centers.

Privately owned Stone Ridge Holdings made the second-largest transaction in the last quarter, with its $1.3 billion purchase of Oklahoma energy assets from U.S. producer ConocoPhillips > in the Anadarko basin, according to Enverus.

"Elevated asset prices in the Haynesville, driven in large part by demand from Asia-based buyers seeking LNG-linked gas exposure, are prompting others to explore alternative regions," said Dittmar.

U.S. natural gas prices at the Henry Hub benchmark in Louisiana averaged around $3 per million British thermal units, according to data from LSEG, compared with $2.23 during the same period of 2024.

Asian companies are stepping up investments in U.S. gas assets as American LNG export capacity grows, with Japan’s JERA in advanced talks to acquire production assets for about $1.7 billion, and Taiwan’s CPC initiating early discussions to buy shale gas holdings, Reuters reported.

(Reporting by Georgina McCartney in Houston; Editing by Liz Hampton and Marguerita Choy)

((Georgina.McCartney@thomsonreuters.com;))