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Oil M&A is back, but investors shouldn’t expect the deals to fill their 10-gallon cowboy hats with cash. The latest transactions are more modest than in past years, and the acquired companies are seeing much smaller premiums.

The most recent acquisition came this past Monday when Permian Resources agreed to buy Earthstone Energy for $4.5 billion, including debt. Permian is paying for the deal in stock at an 8% premium to the exchange ratio between its shares and Earthstone’s stock price over the previous 20 days. That’s not exactly a rich premium in historical terms. Exxon Mobil agreed to a 25% premium for XTO Energy in 2010.

The lack of a big premium results from several factors. For one thing, oil companies are no longer focused on getting bigger at any cost. Instead, share-holders have been demanding that they focus on sending more cash back to shareholders. It’s also becoming more difficult for small and mid-cap oil producers to attract investor attention—and the kind of multiples that lead to rich premiums.
–Barron’s