The first six months of 2014 buried any fears of a 2013 repeat: Mergers and acquisitions activity was its strongest since 2010, according to a report by PwC U.S.

A surge of deals worth $1 billion or more helped push overall values higher, by 5%, in the first half of 2014. Oil and gas deal volume jumped 15% compared to the same six months in 2013.

The numbers: first-half 2014 generated 101 deals valued at $60.5 billion.

“A significant driver of that growth was the return of megadeals, deals bigger than a billion dollars,” Doug Meier, PwC’s U.S. energy sector deals leader, said in an interview.

There were 12 megadeals during the second quarter of 2014, representing $30.8 billion, or 73% of total deal value. In large part, the increase was driven by larger oil and gas companies slimming down by divesting more valuable assets.

Upstream companies were significant drivers of increased value, Meier said.

For that sector, “the second quarter was extremely strong at $21.8 billion in value and 33 deals. That’s a 204% increase over the second quarter of last year,” Meier said.

In second-quarter 2014, upstream deals accounted for 61% of total activity with 33 transactions worth $21.7 billion--51% of total value for the quarter. Another 10 midstream deals added $12.1 billion, and seven downstream deals, $7.5 billion.

Only oilfield services deals fell, with announced transactions dropping 30% and value by 80%.

Shale Out

Shale deals continued to be among the strongest movers in the acquisitions and divestitures market.

PwC found 21 shale deals with values greater than $50 in the second quarter of 2014, totaling $20 billion, or 47% of total deal value. Upstream companies made 17 of those transactions, accounting for $11 billion, or 51%, of total upstream deal value in the second quarter of 2014.

Four midstream shale-related deals in the second quarter of 2014 were worth $9 billion, an increase in volume from the two deals representing $210 million in the first quarter of 2013.

“In the second quarter, overall shale deal value jumped substantially, reaching $20 billion, compared to $4.4 billion in the first quarter of 2014 and $7.7 billion during the second quarter of 2013,” said John Brady, a Houston-based partner with PwC’s energy practice. “The continued interest in shale plays is a testament to how companies and investors view the success of the unconventional landscape, especially as new technologies and methods come to fruition.”

In the second quarter of 2014, the most active shale plays for deals with values greater than $50 million included the Eagle Ford with six deals worth $6.9 billion, and the Niobrara and Permian with three deals each. The Niobrara generated $432 million in transactions, and the Permian, $1.1 billion.

Foreign money returns

Despite the vast improvement from 2013, Meier said he doesn’t believe the market has changed in any significant way. Companies are still interested in pruning portfolios, buying assets with cash flow and looking for production rather than land.

Foreign buyers also reappeared after being largely absent in 2014. Those companies were involved in 15 deals worth $8.5 billion in the second quarter of 2014, far more than the single deal worth $590 million during the same period last year.

Activity in the Gulf of Mexico consisted of two deals worth $251 million, a decrease from the five deals worth $4 billion in the first quarter of 2014.

“A theme to watch is whether large consumers of commodities such as natural gas accelerate their investment in [exploration and production] E&P assets via investments or acquisitions. Additionally, we’ll keep an eye on oil export opportunities given the recent rulings on condensate export,” Meier said.