The appetite for mergers and acquisitions (M&A) in the oil and gas sector is rising as optimism swells.

That’s according to a new report from EY, which suggests confidence is reaching an all-time high since records began eight years ago, with 69% of executives expecting to actively pursue an acquisition in the next year.

This exceeded the global average of 56%, as executives across the sector became increasingly positive about corporate earnings, credit availability and equity valuations.

More than 60% of oil and gas executives are seeking to take proactive measures to address the impact of digital transformation, the accelerated deployment of renewables and adoption of electric vehicles.

The survey shows around 64% of executives are prioritising existing operations and products to deliver near-term growth, as companies seek to rationalise portfolios and improve efficiency.

It also suggests the US, Canada, Australia, the UK and Saudi Arabia are the top five investment destinations.

Andy Brogan, EY Global Oil & Gas Transactions Leader, says: “Buoyed by supportive market factors, including healthier balance sheets, overall consensus on oil price outlook and private equity firms with money to spend, M&A is likely to be propelled further during the coming months.”