Small US oil companies are set to launch more tie-ups as the industry continues to face funding shortages, sparking takeover speculation.
There has been an upsurge in merger and acquisition deals this year as oil prices have recovered to around US$50 a barrel, the study from credit rating agency Standard & Poor’s said.
The rise is set to persist during 2016 but small strategic deals rather than corporate-wide M&A will dominate the market, S&P said.
The buyers are primarily private E&P companies, often backed by private-equity funds, with preferred targets in Oklahoma and the Permian Basin.
Operators in that area include the likes of Nostra Terra Oil and Gas Company plc (LON:NTOG), which this week sold its 20% stake in the Chisholm Trail prospect in Oklahoma for US$2.1mln.
In February, Nostra agreed to pay US$3mln to buy a 60% stake in oil & gas operations in the Permian basin, which it hopes will position it to benefit from a recovery in oil prices.
Magnolia Petroleum PLC (LON:MAGP) is targeting leases in proven US onshore formations, such as the Mississippi Lime and Woodford in Oklahoma and the Bakken in North Dakota.
Magnolia's chief executive Steven Snead said in full-year results on Monday: "What has changed is that operators of all sizes are retrenching fast with leases being relinquished or allowed to expire.
"As a result, acreage in highly productive areas where we have been looking to increase our exposure, or gain a foothold, is becoming available."
M&A in the Eagle Ford and the Williston basins, two of the three largest sources of unconventional oil in the US, has been lackluster as operators there focus on efficiency improvements instead.
But earlier this year, Empyrean Energy Plc (LON:EME) agreed to sell its stake in the Sugarloaf oil project in a US$61.5mln cash deal.
There has also been market speculation that operators such as Pantheon Resources PLC (LON:PANR), which has a 50% interest in several projects in Tyler and Polk Counties, onshore East Texas, could be bid targets.
Pantheon's shares have climbed from 22.75p at the end of June last year to 152.25p now.
S&P said many oil companies still face funding difficulties as bank borrowing bases fell a fifth on average in the first quarter, forcing more spending cuts.
The cuts have led to less drilling and lower reserves, meaning operators could face more bank lending crackdowns in the fall.
US oil production in May averaged 8.7 million barrels a day, more than 200,000 barrels below the April 2016 level, and about one million barrels below the 9.7 million barrels per day peak reached in April 2015.
But S&P said it believed production could recover if oil prices stay at current levels.
The current oil deficit will likely become a surplus again later this year as events that have disrupted production, such as Canadian wildfires and Nigerian pipeline attacks, ease.
Canadian production is restarting and talks between the Nigerian government and rebels have resumed.
But S&P sees continued woe for the offshore industry, which it says is unlikely to begin recovering until sometime in 2018.
A spokesman said: “The two primary variables we believe will affect the pace of recovery are the level and stability of commodity prices as well as the extent to which offshore drilling companies scrap older rigs or cancel new-builds.
“We believe offshore projects will continue to play an important role in many producers' portfolios.
"So if the price of crude improves to and is sustained at US$60 per barrel, we expect some companies will begin to commit capital to greenfield offshore drilling projects.”