Oil & Gas in 2025: M&A and Joint Venture Activity

Macroeconomic turbulence and volatile commodity markets significantly influenced oil & gas M&A activity throughout 2025, with deals showing renewed momentum only in the year's second half.  

On February 19, 2026, the Federal Energy Regulatory Commission (FERC) issued an order rescinding the soft price cap for bilateral spot market energy sales in the Western Electricity Coordinating Council (WECC) region.¹ As previously covered, on July 15, 2025, FERC initiated a Federal Power Act Section 206 proceeding following the D.C. Circuit’s decision finding that FERC must apply the Mobile-Sierra public interest standard before ordering refunds for above-cap bilateral sales and vacating FERC’s orders requiring refunds for certain bilateral spot market transactions in the WECC region that exceeded the $1,000 MWh soft price cap.² FERC’s Order follows through on the proposal it made last July to eliminate the WECCs soft price cap and marks a recognition that Western wholesale markets have evolved over the past two decades to become sufficiently competitive to render the soft price cap unnecessary.  

The oil & gas industry is experiencing a fundamental transformation in how companies access and deploy capital in 2026. Despite strong balance sheets and robust free cash flow generation, the sector is witnessing strategic shifts in funding sources and investment priorities that signal a new era of capital allocation.

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