Deal value in the first quarter was $73.04 billion, while the number of deals rose 36% to 53, PwC said in its US oil and gas "deals insights" report for the first quarter.
"M&A activity started at a blistering pace, with $49 billion of announced deals in January alone – 40% higher than the total for any of the previous first quarters since 2010, " Doug Meier, PwC'sUS oil and gas sector deals leader said.
The Permian sedimentary basin between Texas and New Mexico was "one of the hottest basins globally, attracting even foreign investment" as shale grows in importance over deepwater projects, PwC said
Eleven "megadeals" worth $62.23bn were a major contributor to the increase in deal value, with six in the upstream sector, generating $29.3bn, and five in the midstream sector, the report said.
Three IPOs were also completed during the sector, PwC said.
"As the quarter progressed, we sensed a little bit of a pullback as we exited the quarter. Did seller optimism get a little ahead of the market? Did we have a little too much enthusiasm for the recovery and for what that enthusiasm meant for valuation? Meier said.
Although foreign investors are beginning to turn to US shale, "we see a few signs that the tide may be starting to ebb", as the fall in commodity prices, coupled with declining oil and gas indices, cause buyers to re-evaluate, PwC said.
Singapore-based oil and gas expert Ashley Wright of Pinsent Masons, the law firm behind Out-Law.com said: “The dynamism of the US never ceases to amaze. This level of deal-making has only be in to be seen in the North Sea, but really hasn't hit Asia yet. But US margins are going to get out of kilter, and some of that liquidity should flow to Asia. That is where the demand growth for petroleum will be.”