Buyers looking to reduce natural gas exposure in favor of conventional oil assets, coupled with political fallout and growing uncertainty in the offshore U.S. sector, could whet appetites in the burgeoning M&A marketplace, according to analysis from PLS Inc. and its international partner Derrick Petroleum Services.

According to the report’s authors, global M&A deals are on the rise, with second-quarter M&A activity recording a total of 165 transactions ($43.1 billion), compared with a total of 157 transactions ($47.7 billion) during the first quarter of 2010.

Moreover, for the first six months of the year, worldwide M&A deals tallied 322 transactions for an aggregate $90.8 billion. This bodes well for future deal-making, the report suggests, with global M&A activity “on pace to beat the 2009 full-year total of $150.1 billion in 500 transactions and already fast approaching the $114.7 billion in 556 deals in all of 2008.”

PLS research director Richard Mason says consistent deal activity highlights a robust marketplace that will see its data rooms continuously open to year-end 2010. “Despite the small sequential drop in second-quarter dollar value, the 2010 transaction market remains dynamic as large international and national oil companies continue to pursue North American unconventional opportunities with the expectation of gaining expertise to use overseas,” he says.

Rising above historic norms, asset deals represented 77% of transaction value during the quarter; however, “divestitures remain a recurring theme in the M&A marketplace as companies eliminate assets deemed as noncore, or seek capital infusions to redirect investment to higher-value unconventional assets,” Mason says.

Leading the pack during second-quarter 2010, North America racked up a total of 128 transactions with an aggregate deal value of $36.6 billion—85% of second-quarter deal value, with hunger piqued for domestic shale plays. Following was Latin America, which grabbed $3.3 billion from M&A activity, Europe barreled in with $1.9 billion and Asia hosted $870 million in announced deals.

Spotlighting the U.S., PLS notes that “deal activity continued at a strong pace with 69 announced transactions, dominated by unconventional resources, during the second quarter of 2010. U.S. transaction volume reached $22.4 billion, a 17% sequential gain and the second-highest total in the last year.” Impressively, second-quarter 2010 transaction volume jumped 479% versus the corresponding period in 2009, according to PLS estimates.

For U.S. conventional deals, the price paid for production fell 20% from the previous quarter to $70,352 per barrel of oil equivalent per day, while the price for proved reserves climbed to $19.93 per barrel equivalent, signaling a jump in oil-oriented transactions which accounted for 51% of conventional deals, compared with 23% in the first quarter of 2010, according to the report.

U.S. unconventional deals accounted for 59% of U.S. total value, with the Marcellus shale driving domestic M&A activity with nine deals totaling $8.2 billion. Also red-hot in the marketplace, eight deals in the Eagle Ford shale topped $3.1 billion in value during the quarter. Together, the Marcellus and Eagle Ford represented 88% of all unconventional transactions on a dollar-volume basis, and 52% of all domestic transactions for the second quarter, according to the report.

By deal size, the lead wolf during the second quarter was Netherlands-based oil major Royal Dutch Shell, which secured a leading position in the Marcellus shale by acquiring the principal subsidiaries of Terrence Pegula’s Pennsylvania-based East Resources Inc. and its private-equity investor Kohlberg Kravis Roberts & Co. for $4.7 billion in cash.

Major deals following Shell’s Marcellus takeover include Chinese oil major Sinopec International’s $4.65-billion acquisition of a 10% stake in a Canadian oil-sands development from ConocoPhillips; Apache Corp.’s $3.9-billion acquisition of Mariner Energy Inc., Houston; and Apache’s acquisition of Houston-based Devon Energy Corp.’s shallow Gulf assets for $1.05 billion.